Tuesday, November 27, 2012

Good Investments Vs Bad Investments

Financial education will allow you to decide which ones are good and bad investments. You need to identify the good, and the bad investment, since it is going to be your very own source of passive income. Remember that anything that happens to your investments may also affect your life and even your very own future.

If you have committed an error on investing in a bad investment, you would have learnt that you may need to work a lot harder. These are the consequences of a bad decision-making resulting bad investments. In contrast to this scenario, you can also look at the requirement of good investments.
Good investments, on the other hand, will yield positive results for you and your family. If you will come to think of it, good investments may even turn out to reduce your working years. You need to understand on how to distinguish the good from the bad.
There are different types of investments. All of these things may turn out to be a good investment or a bad investment depending on the timing. A background in financial education will tell you that it is all about timing, and research in order to come up with a good decision.
Stocks, commodities, and currencies are the common sources of passive income otherwise known as investments. If you are going to have an investment, make sure that you have done your research, in order to time all of them correctly, and of course, it is also essential that you take some amounts of risk.
If you are going to have stocks, commodities or even currencies as your investment, you should first consider if you are going to have it for a very long time or you are simply going to have it for the next 3 years. This decision is significant because primarily, if you want to have a short-term goal with investments, it only makes a good investment if it rises up in value within a short time.
On the other hand, if you are going to have the shares for the next 20-30 years, you need to think of things in the long run. Is this investment still going to be beneficial 20 years down the road? One of the things you need to remember if you are not planning to cash in anytime soon is to make sure that you purchase during recession.
It makes sense when buying stocks, commodities and currencies during the recession since everyone knows that its value would decrease. This means that you have to spend less for each share that you are going to have. Since the economy gets to recover for every plunge, the stocks, currencies and even commodities by then would normalize 20 years later. This is an example of speculation. Though not all speculations are successful, you should try this on some of your investments.
A bad investment, on the other hand, is when you do not practice speculation at all but rather just listen with the press releases made on news networks. Whether investing on stocks, commodities or currencies, if you are not doing your own research, you will be blindsided by a great number of things.
Among the many factors that may affect your investment is the fictitious press releases made by news networks. There are times when brokerage firms announce a sudden drop on stocks' value just for you to sell your share. Once you sold them your share, you would be surprised when the next thing that would happen is a sudden increase in value.
This only means that you need to learn, and have a background on financial education, in order to determine which ones are turning out to be good and bad investments. From this premise, you can even increase your chance of financial success.