Here are some useful tips on investing. When you make an investment, you are giving your money to a company or an enterprise, hoping that it will be successful and pay you back with even more money. Some investments make money, and some don't. You can potentially make money in an investment if:
The company performs better than its competitors.
Other investors recognize it's a good company, so that when it comes time to sell your investment, others want to buy it.
The company makes profits, meaning they make enough money to pay you interest for your bond, or maybe dividends on your stock.
You can lose money if:
The company's competitors are better than it is.
Consumers don't want to buy company's products or services.
The company's officers fail at managing business well, they spend too much money, and their expenses are larger than their profits.
Other investors that you would need to sell to think company's stock is too expensive given its performance and future outlook.