Chapter Five - Tips And Tricks
Keeping A Cool Head
Investing can test your patience and your will, especially if you get too eager to earn money fast. A successful investor is cool, collected, and rational -
whether it be in RuneScape or in real life. If you let your emotions get to you, you could soon find that you've overlooked an important detail - and lost
millions.
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Developing Your Investing Style
Every investor has their own "style". Personally, I prefer active, short term investments that are risky yet have a high profit potential. I keep almost
75% of my money in the Grand Exchange at any given time, and I'm constantly on the lookout for good investing prospects.
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Other investors might prefer safer investments with a lower profit potential, or perhaps long-term investments with huge profit potential.
Thinking In Both The Long And Short Term
It's also important to, once you have discovered your style, attempt to balance it. If you prefer short-term investments, make sure to invest in a few long-term
as well. This is an important addition to the "Balanced Investment Portfolio" we discussed in Chapter Two. It can help protect you from losses in the case of an
unforseen price fluctuation, and give you more chances to score a great profit off your investments.
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Dangerous Investing Situations
There are several investing situations that offer the greatest risk, but sizeable profit potential. If you can't afford to lose the money, don't even think
about these. If you have money to spare and are willing to gamble for big stakes, these are the situations to watch for:
• Newly Added Items
Items newly introduced to the game are famously unpredictable, and can increase or decrease rapidly in only days. These items are extremely unstable for the
first few weeks after their introduction, and offer insane amounts of profit potential - but an equal amount of risk. The right item could earn you a partyhat.
but the wrong one could lose you millions. Let the buyer beware.
• Suddenly Rising or Dropping Items
If something rises 150% overnight, beware. These items are either the targets of large merchanting clans or the result of a Grand Exchange bug. If you stock up and the
item continues to rise, all's well and good - but it's extremely possible that Jagex could "fix" the price back to its normal level right after you bought
100,000 for three times that much. Again, this is a huge gamble - risk no money that you cannot lose.
Cutting Your Losses
Sooner or later, the time is going to come when an item you invest in tanks. The following tips will help you cut your losses, and keep as much money as you can.
• Turn It Into A Long-Term Investment
If you believe that the item will return to its current price in the conceivable future, a good strategy is to store the stuff in a corner of your bank as a long-term
investment, until the price returns to normal. This also helps by removing the items from the market, therefore cutting the supply. A downside to this solution is that
it locks up your money in the item, which is a large problem if you invested too much or don't have too much money. This is another reason it's good to diversify your
investments.
• Pull Out Immediately
This is the dramatic road to take. If you think the item's going for a long-term drop, get rid of them in any way possible and as fast as possible. This will contribute to
the price crash, but hopefully you'll be well out of it when it drops even more. This option also frees your cash for more lucrative investments - you should make back your
losses in no time.
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