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THE THREE MOST IMPORTANT FACTORS IN ANY INVESTMENT
I am going to explain the three most important factors when deciding on investments in this article. Keep in mind that no single investment will have all of these factors at once.
1)Growth potential or Capital Appreciation
The most obvious factor is the growth potential of the investment. Everyone wants to buy assets that increase in value over time. That is what growing wealth is about. Real estate and stocks are the most common vehicles that go up in value in the long term.
This is especially important if you are investing for long-term growth. The power of compound interest can grow your wealth by leaps and bounds if you allow it to work by letting the investment grow in value.
If you can add to your investment periodically, you can increase your returns on growth investments even further. You are accumulating more assets over time which will add to your wealth.
To sum it up: Growth is the engine of wealth creation. Those gains can be compounded over time and accelerated even more if you can add to them by accumulating more assets.
2)Downside Protection
The second factor I will discuss is DOWNSIDE PROTECTION. This is related to a couple of things. The first is risk and volatility. How much can your…
