After looking into many ways of generating passive income I've made the decision to invest some my hard earned dollars into shares in a few small, somewhat speculative companies. I don't know how I'm going to go, and there is a possibility I'll lose the lot but I haven't invested much and if one of these guys takes off like a Cisco, Amazon, or Walmart I'll be a very happy guy.
I tried my hand investing in small cap biotechs a while back with mixed results and fortunately broke even on the exercise . I was lucky as I did about 10 minutes research before buying these shares and one that I purchased a lot of nose dived and another I purchased a few of skyrocketed ... net effect I got my money back.
This really solidified the pros and cons of investing in small caps for me and I have learned two key things from this exercise.
First and foremost I won't invest money I cant afford to lose in small caps. I have realised that small caps are often highly volatile and you can easily lose the lot if you back the wrong business. If you are looking for a predictable steady return then there are probably better investing options out there for you.
Secondly I do my own research ! (DYOR) and consider any advice I am given in context believe it or not there are many people in investing forums who do not know what they are talking about or quite amazingly have their own interests at heart not yours.
Even though I don't invest what I cant afford to lose I still like to maximize my chances of a great return by de-risking my investment as much as possible.
My 7 point checklist been really helpful to me when deciding what my stock picks should be.
I've made a number of recent purchases all of which are holding their ground and a few are looking to take off... I'm sure its just a matter of time.
Please wish me luck and remember to always look for a path to prosperity for yourself and everyone around you .. We will do better if we are in this together.