With the coming of the new year it is time to look back at what worked and what didn’t work with your investments. With the high level of ups and downs in the global markets, here are your keys to success for 2012 if you are serious about wealth creation.
Look for low risk strategies.
First and foremost, steady does it in the game of building wealth. In certain markets, it is OK to swing for the fence on every try, but eventually this will catch up to you. In a volatile market that moves around a lot, a fast moving investment strategy can quickly go against you if you hold onto it too long.
Take the approach of a marathon runner and look to make returns on low risk strategies. Ideally look for strategies that will allow you to build wealth by generating passive income payments on a periodic basis. I look to make returns on my investments at least once a month. I currently target 10 – 15% per month in the stock market although I could easily make this 20% with some added risk. As I get older I’m all about low risk, conservative gains. You should do the same with your investments if you really want long term success.
The stock market has had a nice run up in the last year (2011) so my guess is that it may be due for a correction. You might still be able to do OK in the stock market if you go for stocks that have not had huge runs but pay big dividends and are profitable. For example McDonald’s is a good stock and has been steadily rising ever since (over two years) I have been tracking it.
In the stock market, focus on stocks that are moving in tight price patterns. Look for stock charts that show steady trend lines. These will be the stocks that will be profitable for you in the long run. Stocks for profitable companies that move no more than 1 or 2 per day are the perfect for low risk investing strategies.
Making money online is very lucrative right now and very popular. You do have to do your research to make sure you don’t get scammed but there are possibilities out there. Consider buying websites that already generate monthly income. In the world of wealth building, cash flow is king. Any investment that can add to your monthly income is an investment you want to look into.
Commodities – gold had a nice run but it is cooling off a little bit right now as the economy recovers. This gives you the opportunity to buy gold at bargain prices before it takes off again.
If you don’t have the money to buy gold, consider buying some gold stocks and mining companies as they closely track the price movement and pattern of gold.