Return On Investment: Key To How To Invest

by humagaia

Return on investment is the key factor to consider in how to invest. ROI calculations focus your mind on best investments. Comparing ROI rates brings maximum benefits to portfolio.

The key to investment success is to maximize the upside and minimize the downside. Limit your risk whilst maximizing your return on investment. Balancing these two factors in your calculation regarding the best investments to make, ensures you make the right decisions more often than not. You will never get it right all the time. But getting it right the majority of times is possible when ROI is taken into consideration. Learn the fundamentals of investment strategy. Put them into practise. Take advice. Sift through the advice for the gems. Then action your options by calculating risk and return on investment.

Know How To Invest

Sifting the good advice from the bad advice

A new world of investing has been crested by today's rapid pace of change.

The pace of change has also created new ways to gain knowledge about how to invest. One result is more choice. Another result is that there are more chances for the informed investor to profit. With the increase in information sources comes the task of sifting out the good information from the bad.

Is the advice given true and unbiased, or is it supplied in order to support a vested interest?

Now more than ever, the key to successful investing is having uncompromised information. It is knowing the "tricks of the trade" and how this new world of money works, that is the key leading to successful investments.

But where do yo gain this knowledge?

Vested Interests

As mentioned in previous articles:

you were not taught investment strategy in the educational establishments you attended.

The printed media relies on Financial Institutions for their income, and therefore supply compromised information. They have a vested interest in presenting the information in a particular way.

Similarly, most information presented on the Internet is there because the writer has a vested interest. The author is presenting the view of his employer: as an affiliate, an employee, a marketer, a salesman.

Very few locations for information are there because of altruism. For instance, these articles are here so that I can make money.

Be aware! Be careful! Be vigilant!

Ask yourself whether the information you have found is the best information upon which to make considered decisions. I hope you make the decision that, although I may be making money out of it, the information contained in these articles has merit.

This set of articles should give you a step-by-step guide as to how to make the right decisions to obtain good knowledge, and produce good strategies, for your personal investment plan.

You will learn that it is surprisingly easy to invest successfully if all the jargon is stripped away.

Creating your own financial strategy is just a matter of utilising simple principles to your best advantage.

Return On Investment

The most important piece of information you will ever receive

ROI or 'Return On Investment' is the single most important criterion to focus upon. 

Why is this?

Maximizing the return for your effort, and on the money you invest, is fundamental to developing long term wealth.

But which investments are best at any one time?

You must have a basis on which to calculate which option to invest in.  By calculating the amount of, or percentage, increase, real or potential, in the money to be invested, you have that basis on which to work.

Calculating return on investment focusses the mind on the best investment to make.

Return On Investment Wiki

The term Return on investment can have several different meanings: Finance: "Return on investment rate of return, also known as 'rate of profit' or sometimes just 'return', is the ratio of money gained or lost on an investment relative ...

Of all the options that you will have, the best to take forward is that with the best potential ROI. But this calculation must be tempered by the level of risk you are prepared to undertake.

It may be that you calculate that a particular investment may give a 100% return on investment, but the downside may be that there is a risk that you will lose all your investment.

If you wish to speculate, that is your prerogative.

However, balancing ROI with risk analysis is essential to create a balanced approach for your investment portfolio.

Increase wealth
Increase wealth

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Financial management, wealth management and investment strategies should be pulled together to create a total wealth creation and retirement plan package for financial health.
Updated: 12/14/2012, humagaia
 
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