In this post I hope to highlight a few ways that online business owners can invest in the stock markets. But before I do, I would like to say something first. There is no such thing as an “investment blueprint.” Those who try to find “a list of steps that will guide them to ultimate investment success” will only end up in failure. But here are a few things that will help you, an online business owner, be a better investor in the financial markets.
Know what you’re good at.
I don’t know why, but many people don’t invest in their industry. For example, a lot of consultants don’t invest in publicly traded consultant companies. Same goes for online business owners. A lot of small, online business owners don’t invest in internet stocks. It’s never really made sense to me. Why would you invest in an industry that you totally have no clue about, when you can invest in internet companies (which you would understand better, because your main occupation is to do business online!)? Only by investing in what you really understand and are capable of seeing the future trend can you make decent investment returns. For example, I know a friend who used to work at a commodities company. He eventually got tired of working for others, and ever since, has been a wonderful commodities investor. So if you’re an online business owner, investing in tech stocks would be ideal for you, because tech is what you understand the best.
How much time do you have?
The problem I see with many investors is that they don’t know what kind of investment strategy to use. Those who only have an hour a day of monitoring the markets invest as if they were day traders. So the question is, how much time a day do you have to monitor the stock markets and invest? If all you have is a few hours, then I recommend you become a long term investor. Being a short term investor requires a lot of time to analyse the short term fluctuations.
Word of advice – don’t short stocks.
“Shorting” stocks refers to making money off of the decrease in stock prices. Many people are tempted to short stocks when they see a bubble or stock prices that have gone too high. Simply put, don’t short stocks. Shorting is far too difficult, as it involves immaculate timing, which is something that even 99% of full time investors don’t have.
This guest post was written by Tony Chou at Investorz’ Blog, who teaches investors how to invest and shares his market outlook.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.