6 Market Securities That Affect Your Investment Potential

Investments are a double sided sword, they can cut you both ways. One on end of the spectrum, investing in the right stock has the ability to turn you into an overnight millionaire, and on the other, they can leave you with a fat $0 after initially investing well over $5000.

So, how do you invest in something that is profitable? I comes down to time, research, and your ability to see opportunity, but it also comes down to a few outside factors.

Assuming your invest feet are already a bit wet in the water, we put together 6 market securities that affect you investment potential. If you pay attention to these factors, you should be able to put your money in the right places to make a profit.

The Status of The World

The world affects your investment potential. From natural disasters to economic collapse of an area, the world’s status has a direct correlation to your profit potential.

If there is a natural disaster somewhere in the world, the raw materials that come from that region will be affected. Take the earthquakes in Asia as an example. One of the biggest impacts of that disaster to the economy came in the form of price hikes for rice. The fact that supply for the otherwise abundant raw material was directly affected by the earthquakes, the world saw rice prices raise, and rice companies stocks paid the price.

A similar situation happened after the Brexit movement, but for an entirely different reason. Uncertainty about the U.K.’s position on trade with the EU and the rest of the world left investors in panic mode. Around the world, stocks and currency value started to drop, and markets that were involved with the U.K. started to clear out. Although that has more or less fallen to the wayside, the Brexit movement created a major market shift. It was a potential for people to lose tons of money on the downswing, but an opportunity for new investors to profit off the upswing that followed.

The FED and GDP

GDP directly affects how the FED lends money. When GDP is high, the market is good, and the FED tends to drop lending rates in hopes of obtaining more potential business. When the GDP is not doing well, less money is made, so rates for lending go up.

By paying attention to the overall GDP throughout the months, you can find golden opportunities to jump on growth trains after buying low. Stocks that normally see growth despite GDP numbers will see bigger gains when the GDP is good, so try to buy at low points if you can.

The Overall Market Health

The entire investment market has a health cycle too. Even when things seem to be going great in terms of GDP, that doesn’t automatically mean it’s a good time to buy or sell. You want to watch the trends in the market because there are normally massive shifts that happen all at once. If you can detect these shifts, you can buy into new growing industries that will make you investment more than worthwhile.

The Industry Market Health

Whatever your investment opportunity is, you want to make sure it’s in a growing industry. A growing stock for a company in a dying industry might not be the best idea. Unless this company has a new and revolutionary idea that will save their industry, chances are, they will end up fall like the rest of them in due time.

On the other hand, if you find an investment opportunity in a brand new and booming industry, it might be worth the money to pick up a few stocks. These stocks tend to grow as crazy rates, and can normally be sold at a profit after a market fall if you get them early enough. These are also the types of opportunities that can turn you into that overnight millionaire were talking about before.

The Growth Rate of The Stock

Growth is good, but it can always plateau. If you are looking for a great profit maker of an investment, look for an opportunity that has shown consistent growth in big numbers. The reason these are great investment opportunities is because you can watch them as they grow and sell them before they plateau. This means you can jump out of the game before the major ups and down start.

The Initial Cost of Investment

How much it costs to invest in your opportunity and how much you get in return should help you with your investments. If you find a new prospect for investment because you have seen major growth in the market for them, make sure you can get a healthy number of shares for your money. The more you get from your investment, the greater the chance of making a large profit off the investment in the future.

Conclusion

You have to playing the game with open eyes to hit the ball, and watching these factors like a hawk will help you do just that. Take your time, weight your options, and catch that investment opportunity when the time is right.

What factors do you think about more important to mind when looking to invest? What makes your strategy better than the rest? Share your tips in the comments below.

Leave a Reply

Your email address will not be published. Required fields are marked *