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Determining your investment goals is one of the basics of beginning investing in the stock market. If you wish to make money investing in stock over the next several years you will have a different approach and investment strategy than if you are interested in long term investing with a comfortable retirement as the first of you investment goals. Investment goals can be specific such as doubling your money in a year, raising enough to send you first child to a private college, or simply staying ahead of inflation. Once an investor has decided upon his investment goals the choice of investments, degree of acceptable investment risk, and amount of investment capital required becomes possible. No matter what one’s investment goals are, both traders and investors will need to become familiar with both fundamental and technical analysis tools. Long term investors will want to learn how to pick stocks with a low price to earnings ratio, high margin of safety, and good intrinsic stock value. Traders will often want volatile stocks and volatile markets. Both will commonly profit from the use of Candlestick chart analysis in order to profitably anticipate short term stock price movement.
The most basic of investment goals is to stay ahead of inflation. When investing in gold, for example, one typically needs to buy gold bullion when the price is low and sell when the price peaks. Gold bugs, those who see gold as the only real and secure investment, typically tout the fact that the precious metal keeps ahead of inflation and retains its purchasing power over years, decades, and centuries. However, they seldom mention that gold peaked at around $800 an ounce in 1980 and fell to around $200 an ounce where it stayed until it started climb again about a dozen years ago. Now gold is $1,500 an ounce which means that if you had purchased an ounce of gold in 1980 it would have only doubled in value in thirty years. Using Candlestick pattern analysis one can trade gold futures, options on gold ETF’s, or gold mining stocks. In doing so one can profit whether the price of gold rises or falls. If one of one’s investment goals is to enjoy a better return on investment than the rate of inflation then anticipating price changes and buying or selling short can be more profitable than holding the precious metal over decades.