Some people do it by poring over company data: earnings reports, balance sheets, income statements and the like. Some people look at stock tables and try to figure out which way a stock will go next. Others seek out professional opinions – broker white papers, pundits on TV or the commentary of well-known, successful investors. And more than a few operate by “gut,” relying on little more than intuition or a vague sense of what they think is going to work. Truth be told, any of the above methods can sometimes be effective ways to evaluate an investment opportunity. But if you’re like most snowbirds, and rely on your investment portfolio to fund a long and fulfilling retirement, you want something better than that. When it comes to deciding which opportunities to put your money into (and perhaps more important, which ones to steer clear of), you want a process that’s reliable, doesn’t take up too much of your time and is based a lot more on carefully considered logic rather than dumb luck. Here are some important questions that can help you do that. No, the following isn’t an exhaustive list of everything you need to think about when considering an opportunity, but they’re a good starting point. By thinking carefully about these questions, you can “pre-screen” investment ideas and quickly identify which opportunities deserve further analysis and consideration, and which don’t. Eleven questions to ask when evaluating an investment opportunity By James Dolan Finance 26 | www.snowbirds.org
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