Many say the mane problem with innovation is the high potential risk but I have come to understand that this is not the complete truth. Infact buy just following a few simple steps you can reduce the risk of your portfolio with simple investments. These steps are by doing your reserch and using these innovative investments in tandem with you more legacy investments.
Most investors probably think that doing your reserch before buying into an investment is the smart thing to do. Few however know how to conduct this correctly. Many deside just to listen to whom ever appears on tv and tells them something is a good investment. Some even choose to buy because a stock is up. These are not sound methods. When you are think about buying a stock you have to understand it first. When a CEO says they are going to change the world you should be sceptical. Not to the point of ignorance, but you should ask yourself question. Does this CEO have previous experiance leading a team, a successful track record, do they have a sound plan for the future of there company.
To get your financial data you will have to read the available Sec filings, these are the sources any good analyst will get their data from. You will also find all the potential risks of this company in there. They are forced to put these risks in because in the event they do file for bankruptcy, they have to have stated the reason the company failed previously to receive any compensation. They also state the direction they hope to aim the company in as well. You will likely be able to eliminate most unlikely to succeed companies from here.
The next place you want to look is google. You should look over the website to ensure it is perfesonally done. Aldo google all names associated with the management team. The CEO, heads of departments, finical backers If you can. Do these individuals have good track records. Do they often leave projects quickly? This could be a sign them not being team players. You want people who are also in it for the idea not the money. Often these companies will operate at a loss for some time so strong leaders who won’t give up are a must. I personally will only invest if the upper management also owns lots of stock or is paid a large percentage of their income in stock.
Now that you have done the research you should be down to a small amount of business will good odds of survival. Rember with investments anything you can do to reduce your risk will save you in the long run.
Terraforming Finance 