Posts Tagged ‘fotolog

Smart Investing

9, May 2009

Creating wealth requires smart investing which is something you have to learn if you want to achieve financial freedom.

You can’t start from zero and expect to have wealth, and even if you do you won’t become rich overnight. It takes time to build wealth and the more time you put into your investing you will inevitably accumulate wealth.

In order to do this you will need to focus on smart investing.

If you want to learn more about how to invest smartly you can look here.

How to Focus on Finding Growth Investments

Over the past few years the market has witnessed a rise in value of growth stocks and a substantial rise in growth stocks’ earnings power. Growth stocks may be worth more than growth bonds, but there is a major difference. Growth stocks pay out over long periods of time and their earnings remain high year after year.

If you are thinking of buying growth stocks you need to put your mind in a different mindset.

Remember, growth stocks can buy themselves into trouble, and this can have serious consequences.

You can build wealth and enjoy a good life, but it won’t happen overnight.

Focus on buying small-cap growth stocks instead of growth bonds

You can buy growth bonds by paying the coupon, but you won’t get as much return as you get from growth stocks.

You may be tempted to buy growth bonds when they are cheap because they are not that attractive from a price-to-earnings (PE) standpoint. However, there are pros and cons to buy growth bonds and it’s always good to check out the good and bad that comes with buying growth bonds.

You can avoid this by sticking to small-cap growth stocks. In general, the smaller the company the more likely it is to produce higher growth and to get dividends. Small-cap growth stocks tend to offer higher returns than large-cap growth stocks as they have lower risks of losses. However, as with all investments, there is always risk.