Taking your money and depositing it in different investment tools may seem easy. But if you want to be a successful investor, it can be challenging. Many retail investors - not investment professionals - lose money yearly.

There could be many reasons for this, but one thing that any investor with a career outside of the investment market understands is that he doesn't have time to research many stocks and doesn't have the time to help him. There is no research team. This monumental mission.

Therefore, you will suffer a loss if you don't do enough research. Sadly unfortunate, right? But, the good news is that you can reduce your losses and analysis by looking at some of the critical investing factors. Learn more about the five vital investing principles below.

Buy Low, Sell High

Although it may sound straightforward, it is a unique part of our lives where things getting cheaper feels terrible. With oil prices falling over the past year and a half, some consumers are complaining of a fall in prices, but the slow fall in the market is seen as a bull market's death toll.

These are not mutually exclusive facts. The current bull market will come to an end, and in almost all long-term perspectives, stocks are a lucrative investment that usually rises.

Price-To-Earning Ratio (P/E)

Suppose you are looking for someone to help you with your investments. You interview two financial advisors. You have a long history of making people a lot of money. Your friends have seen significant returns from this financial advisor, and you see no reason why you shouldn't trust them with your investment funds. They tell you that for every dollar they make for you, they keep 40 cents and leave you 60 cents.

Another financial advisor started working. They have minimal experience, and although they look promising, they don't have a track record of success. The benefit of investing your money with this financial advisor is that they are cheaper. They only want to keep 20 cents for every dollar they bring you. But what if you weren't paid as much as your first financial advisor?

Hence, this ratio measures a company's current stock price relative to earnings per share. The company can be compared to other comparable companies, allowing analysts and investors to determine its relative worth. The P/E ratio can be determined by comparing the current market price with the cumulative profits of the last four quarters.

Filings

Some investors think they have a sixth sense of finding good companies, but others must do their homework. There's no better place to start, as the documents that public companies typically file with the SEC must describe everything from the company's finances to potential conflicts of interest and risk factors.

The yearly 10-K includes most of the information from quarterly and annual financial statements to business segment details and management commentary on growth opportunities and costs. The regulatory filing will describe any changes in senior management, acquisitions, and stock transactions of any officer or board member.

Beta

Beta seems hard to understand, but it isn't. It measures volatility, or how erratic a company's stock has been over the past five years. Basically, it measures the systemic risk of a company's stock relative to the market as a whole. You can usually find beta values on the same page as the P/E ratio when you look at stock search pages like Yahoo or Google. Think of the S&P 500 as your pillar of peace of mind. Beta is high if the company's value has increased more or less than the index over the five years. For beta, anything more significant than one is high, higher risk, and anything less than one is low or less risky beta.

Conclusion

There is no substitute for a comprehensive search. However, one of the most important ways to protect your wealth is to profit from dividends, find stocks with a proven track record, and invest long-term. You should avoid or minimize aggressive trading forex strategies if you don't have time.