There are many different ways you might approach investing depending on what your goal is. There are times when you might look for safe investments when you need to ensure your assets don’t take a loss.
Investing in mutual funds or greatly diversified ETFs is one way to do that. But when you want to double or triple your investments, you need to invest in stocks that entail a little risk, but that has great outlooks. Here are a few ways you can do so.
1. Dividend Reinvestment
If a company’s stock you purchase pays dividends, you could go with a dividend reinvestment strategy.
Instead of just pocketing the dividend to spend on other things, having it reinvested back in the company and acquiring more shares while you are at it is a great way to increase your earnings, or potentially even double or triple them.
You’ll want to make sure the company is in a good position so you don’t risk losing your investment, but it is a great way to grow your earnings in a solid company.
2. Investing In Growth Stocks
Growth stocks may or may not be the best way to double or triple your earnings, but they certainly could.
These stocks typically don’t pay dividends, so most of the cash on hand they have is used to invest in major technology that they hope will grow the company.
There have been some growth stocks that have grown by as much 1,000 percent, though that isn’t typically the outcome. On the other hand, there are also growth stocks whose next big things ended up not selling well at all, and in the end, the stocks went under.
These stocks do carry more risk, but if you find the right growth stocks, you could see very high returns doubling or tripling investments.
3. Investing In Special Purpose Acquisition Company Stocks
One kind of stocks that are a little like growth stocks, but in a different way are special acquisition company (SPAC) stocks. These are companies that use funds from an IPO to go out and acquire or merge with another company thereby increasing their value that way.
As the folks at Money Morning put it, it is “a bit like private equity investing or venture capital investing in that you are giving money to a sponsor to buy a business that will pay off with high returns.” Or at least, in theory, you hope they acquire a highly valuable company.
There also are some failsafe mechanisms built into SPAC stocks that can minimize risk. For example, the company usually has to make an acquisition deal no later than two years from the date of the IPO. If they don’t, your investment is returned to you.
You can also opt-out during a shareholder vote period in which the shareholders determine whether making the merger is a good idea. If you don’t like the deal, you can opt-out and have your funds returned to you.
There are some notable SPAC deals whose mergers went quite well:
- Virgin Galactic stock acquired by Social Capital Hedosophia
- DraftKings bought by Diamond Eagle
Some deals like these brought a boom in stock and did triple investor earnings. Some have not though and ended up making a big loser deal. That is why you need to read up on the details of all deals before going all-in on them.
In conclusion, doubling or tripling your stock investments can happen, especially if you are willing to stay committed to investment.
But if you are going to do it via growth or SPAC stocks, you need to read a lot of information into the company and consult with a reputable financial advisor before buying into them.
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