I am very happy to answer the question,"Which is the safest investment strategy?" According to the association of stock brokers, there are millions of individuals who invest in stocks. Unfortunately, only 3% of investors are able to consistently make profits. Now you understand why the common person thinks investing is too risky.

If you look at these statistics, you can deduce that 1) 97% of individual investors lose money by trading in stocks and 2) (sadly or fortunately, depending on your side of the trading game), 3% of individual traders/investors earn all the millions of dollars lost by the 97%.

What does the 3% know that the 97% does not know? This is the secret that I will reveal to you today. The concept will sound very simple and obvious that you may be tempted to ignore and forget it. However, I urge you to remember this simple concept and your investments will be safe.

What Can Happen?

Whenever you invest, there are 4 things that can happen.
1) You can make a big profit
2) You can make a small profit
3) You can make a small loss
4) You can make a BIG LOSS

Why Is A Small Loss Necessary?

If you do not accept any risk, it means you want to settle for fixed rates of income which often lead to small profits above the rate the rate of inflation. In order to anticipate making a big profit, you must accept to take some risk. The trick of the trade is to minimize the risk such that if your investment plan fails, you will incur a small loss. Making a small loss is not bad because it will cancel out with making a small profit over the short term.

The Secret
The pedestrian investor focusses on making big profits and forgets to safeguard against making the big losses. It is the big losses that will ruin your finances and chase you away from the investment game!

The secret is - NEVER MAKE A BIG LOSS!

It does not matter what investment vehicle you use, the secret of safe investing is to put in place a strategy in your investment plan that will eliminate any chance of a big loss.

If you are not sure how to protect yourself against the big loss, please seek the help of an independent Financial Advisor. If you first prevent a major loss, you will retain the big profit and safeguard your initial investment capital.

In another article I will discuss several ways of preventing the big losses.

Homework: Implement a strategy in your current investments that will prevent a big loss from wiping out your capital/principal and future profits.