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The 10 Step
Investment Process
James Delrojo
This is the system
that I use in my investing and it is also the system that I have taught
to many other professional investors.
1. Desired Outcome
Always start the assessment of any potential investment by having a
clear picture of what you want to achieve through this investment and
why you want that particular outcome.
It is important that your desired outcome is compatible with the larger
picture of your major goals and purposes
2. Select a Strategy
Decide what investment strategy is appropriate to meet your desired
outcome. You may modify this as you go through the other steps in this
process.
Of course the greater your knowledge of investment strategies the better
equipped you will be to choose an appropriate strategy to meet both your
goals and your current circumstances.
3. Identify Risks
It is crucial to identify the likely risks and then design a practical,
sensible, effective risk management plan. Also note that you go through
the risk identification before the profit analysis. This is to ensure
that you don't get swept away with enthusiasm for a potential profit and
forget to manage the risks.
Make sure that your risk analysis is realistic rather than optimistic.
There is a place for optimism in wealth creation but it is certainly not
in the risk management phase.
4. Identify Profit Potential
Profit potential needs to be thoroughly analysed and you also need a
profit management plan to ensure that you actually collect on profits at
an appropriate time.
So often, particularly in the stock market, would-be investors have
paper profits but, because they have no strategy for when or how to
collect, they hang in until the profits have evaporated.
Also it is important to decide the form of your profit. Will it be in
cash or in assets, for example?
5. Compared to What & Cost versus Benefits Analysis
This is where you consider alternate investments and/or strategies and
do a cost benefits analysis on each to help you decide the most
appropriate investment for your desired outcome.
6. Identify and Overcome Obstacles
Almost all investments have potential obstacles that you will have to
overcome in order to maximize your returns and minimize your risk. It
helps to have identified them in advance and to have formulated a
strategy to overcome or avoid them.
7. Design Your Exit Strategy
You should never enter an investment, or business, without having a
clear strategy for exiting in the event that things go badly wrong or in
the event that you have made a large profit and wish to move on.
8. Make a Decision
Once you weigh up all your research it is time to decide whether you
will proceed or whether you will look for a different investment.
9. Take Action
A decision has no power until it is acted upon. If you have decided to
proceed then take the necessary action step to put your investment into
reality. If you have decided not to proceed then start taking action to
find a better investment opportunity.
10 Review Your Outcome
Every action produces an outcome of some kind. If your outcomes are
favourable then keep on with your plan, if they are unfavourable then
review your plan as required, if they are disastrous then action your
exit strategy.
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James Delrojo
would like to help you by giving you his ebook "Unleash the Success
Power of Your Mind" (valued at $27) completely FREE. Go to
www.YourSuccessMind.com
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