By flipping a coin?
I'm sure a great number of people wish it was that easy, only the thinking phase is one hell of a job, possibly more draining than a 24hrs work with a few minutes launch break. There are several things to consider when dipping your toes into any well of desired riches, but sadly, a large number of people don't really gage this measures before choosing an investment. I think it's pretty basic, but highly overlooked in the present world. Maybe, just maybe, this is what differentiates successful ventures and individuals living in regrets or no significant progress.
I want to highlight 6 important things, which, in my humble analysis, is worth paying attention to when choosing an investment.
One thing I'd love to point out is that: one should never invest in any business or project, just because he or she is familiar with who runs it. That's just one of the list of mistakes people make. When you're choosing an investment, you're not judging the project just by who runs it, but in what they are pulling off. If I'm being real, investing in humans is the worst type of venture. That said, the points to consider is as follows;
Time and season in relation to the investment
Development
Nature of funding
Market Demand
Public opinions plus personal research
Location
Time and season in relation to the investment
Although crypto has brought investment options of great yields to the masses, I really believe a number of people make bad investment choices due to no diligent examination of key factors. Time and season really matters a lot when it comes to choosing an investment. Imagine investing in a newspaper company when information has taken a huge turn, the media is slowly rendering physical copies of information useless. Though some other factors come into play, the overall remains that this type of framework is expired, so the longevity and success thereof is time paralyzed.
Development
Of recent times, I've been fund of saying invest in developments, not public opinions. This however has two sides to it, which will be further explained in the appropriate section. That said, developments is one of the key factors to consider, because it compasses the flexibility of your investment. Developing networks comes with the advantage of scaling, it is not trapped in the state of an already known production province, but rather exposed to the utility of new tools via exploring options. Businesses that tend to develop new things are more profitable than ones that remain stagnant. Though the risks of adding a new product are there but the merits of building new solutions, even though it's just on top of one's pre-production, is massive, this is something to consider as well..
Nature of funding
Uhm, this one looks deep into key areas like costs of production, costs of maintenance, costs of transportation perhaps, and so on. It's all about examining the company's capital, the source of it and how sustainable it is in the long run. Take businesses 100% funded with loans, this is the worst thing that could ever be done, it is highly dangerous for both the company managers and the investors. It's basically running its system in debt terms, this restricts a lot of things. It restricts proper project building, because the priority is shifting from pleasing customers and investors, to paying back a huge debt. So therefore, the focus becomes a hustle and hassle for quick bucks to sort things out. It is a very unhealthy venture to start with. A healthy institution should not only be 80-90% founder funded, it should also have reserves for casualties. So when one is looking to venture into a project investment, he should consider the funding nature of that institution.
Market Demands
Demand defines any business at all. The rate at which it is needed by the public, determines what impact the solutions it is actually building is making. Market demands solutions to pre-existing problems, so if a company is coming out to produce, it's either building solutions on top of pre-existing products, or it is creating fresh items that tackle existing problems in the industry. Nobody is going to be looking to buy a product that doesn't have any significant impact in the system. Take a look at crypto, the idea surrounding a project's tokenomics determines the demand, the rate at which people would scoop out its supplies is based on what solutions it offers in an ever expanding system. So when you look at the economy of a business, and it's built around products not marketable, then it's a red flag…
Public opinions plus personal research
This is where the other side of developments is explained. Public opinions matter to some extent. That is because, when you ask around, you get to gather some ideas on what exactly a business looks and feels like. Considering that it's all set up to be of service to the world at large, not just one individual, you gotta want to know what the public thinks of it. This would be further stretched when tackling location. When you're gathering information, it gives you an idea on what sections to dig deep into. Research will help you uncover the true potentials or probably weaknesses of the company's economy or system, so public opinions come into play to better structure your portfolio.
Location
Sometimes, it's not about the physical business map, that's considering where you must have chosen for research. Take bitcoin for example, when you go into a space of no coiners to fetch information, you don't overly allow it to influence you, because for the most of it, this set of people aren't interested in the system, but they are not the whole world notwithstanding. That said, physical business location also matters too, imagine building a company for pads where women in that location are acquainted with menstrual cups. These are things to consider when venturing into any business, whether as an investor or a manager. Tackling the possible downsides will help structure its success trend. Blindly investing in any project never works out 100%, hope this helps…