Many investors are intrigued by the idea of doubling their money on an investment. Since not everyone can successfully move to that direction, it is a thing of honour when an individual achieved the goal.
There is a risk-taking part of us that likes instant profit, but many investors are worried about the outcome of things.
However, it should be emphasized that doubling one’s money is a realistic goal that we should always be pressing toward, and that such ambitions have also dipped some investors into trouble.
In this article, we consider the right and wrong ways to invest for big profits.
Ways to Double Your Investment
The Classic Way — Earn it Slowly
Some of us should recollect the classic Smith Barney commercial from the 1980s, where actor John Houseman said “we make money the old fashioned way — we earn it.” It tally with the idea of the ‘most traditional way of doubling one’s money’.
It is majorly believed that the surest way to double one’s money over a amount of time is to invest in a strong portfolio diversified between blue-chip stocks and investment-grade bonds.
Even though it won’t double in a short period of time, it will eventually grow in the long-run.
The Contrarian Way — Blood in the Streets
In the investing world, there are times of real trouble where everyone tries to run away from the ship due to the unbearable heat. It happens on numerous occasions.
But then, some investors believes that is the best time to buy even more – not because people are jumping into the boat, but because everyone else are trying to get out.
Someone said that smart investors “buy when there is blood in the streets, even if the blood is their own.”
It should however be empahsied that this isn’t an encouragement to buy unpleasant stuffs.
Instead, smart investors, after doing their own homework, looks around for periods when nice investments become oversold and they capitalize on that.
The Safe Way
On the highway, there is a fast lane and there is a slow lane – but they all will eventually take everyone to the same place. In the same vein, there are both fast and slow ways of doubling one’s money.
You know, some choose to pass the slow lanes due to fear of the risks involved in the fast lane.
In the investing world too, some are usually scared of the fast route due to the risks involved.
For such investors, investing in bonds may offer a reasonable less stressful journey to the same destination.
The Speculative Way
Some takes it slowly, but some loves the fast ride. These ones desire a lot of excitement in their portfolios and they are always keen on making larger risks to earn more.
For such people, the quickest methods to achieve this may be the use of options, margin trading or penny stocks.
Stock options can be used to speculate on any firm’s stock. It can turbo-charge the portfolio performance of an investor.
However, care should be taken (and adequate plans should be made) because options can put a person into trouble in no time.
There is also the option of buying on margin or selling a stock short – which gives the chance to borrow cash from a brokerage house to buy or sell more shares than they actually have.
This can then raise their potential gains. But then, it is necessary to add that these stuffs are for the strong-hearted ones, as they can spell doom if they boomerang.
The Best Way to Double Your Money
For us, the best way to double your money is through that matching contribution received in one’s employer’s retirement plan.
It might not be too pretty, and those around might not be carried away. But it is superb to get some cents for every dollar you deposit.
However, not all plans offer immediate vesting, as there are some that you need wait for some time before getting ownership of your employer’s contributions.
The Bottom Line
In itself, there is nothing entirely wrong with wanting to double one’s money.
However, one must be very careful and wise. Today, there are a lot of offers out there – and many of them are, unfortunately, scams. If something seems too good to be true, then you should be more careful.
Although there are various other methods you can utilized to double your money (apart from the ones up there), always be at alert and watch out for scammers.