By taking the time to learn all you can about a given investment, sector, industry or even individual stock you will not only benefit from a better understand which can lead to stronger returns, but you can sell that information to the general public and make some serious money!
How to Pick your Niche or Industry
Picking a profitable niche or industry to write about might be as simple as looking into your favorite companies. For example, you may be an outdoors kind of person and really like products at Cabela’s or Bass Pro Shops. This would give you an excellent entry point to specializing in outdoor, hunting and fishing retail shops.
Learning to invest and specialize in stocks you are familiar with is a Peter Lynch tactic that has paid off very well for many investors. Take a look at products you use, industries you naturally follow due to a hobby or if you have a career in a given sector, consider specializing there.
What is the Barrier to Entry?
You might think being a specialist on tech stocks is the way to go. Or maybe you know how incredibly profitable penny stock newsletters are that talk about biotechnology and pharmaceuticals. The problem with going with this route is that it might be incredibly difficult to learn this sector.
See, you are not trying to give an impression that you are familiar with a given niche or industry but that you genuinely are. Just because you are a user of Apple and Android products does not make you a specialist on Google and Apple.
Thus, it is difficult to see your average investor being a specialist on life-saving drugs if they have no background in the medical field or training. Becoming a specialist on restaurant stocks could be achieved by a number of years experience in food service and hospitality.
Consider Popularity and Daily Trading Volume
When you are looking into an industry or niche to specialize it is important to keep in mind the popularity of it. This can be assessed in a couple of different ways. A stock like CSX has a daily trading volume of approximately 8 million. In comparison the most respectable penny stocks traded on the NASDAQ only have a trading volume of about half a million.
What does this mean? The higher the trading volume, the more likely you will have parties interested in your expertise. At the same time, you are also likely to have more competition from other specialists. Just the opposite is true for a a low volume stock or sector.
As the example above illustrates, there are more people trading and investing in railroad stocks than there are deep sea exploration stocks.
How Can I Profit from my Industry Knowledge?
The most common way to use your knowledge for profit is to produce a blog, like this one. Starting a blog is rather simple to begin and can be as easy to maintain as you make it. It is the least formal method of using your knowledge as well as the least risky.
From there, you can produce an ebook that specializes on that niche. After you do your research, you could easily produce a rough draft within 30 days. It can go on Smashwords, like I am doing or Amazon – making you some extra cash.
If you have more incentive to write, a newsletter would be very appropriate. Just be careful, because the expectations are higher and readers will look for more frequent content from you. You could start with an annual newsletter or quarterly. Monthly or weekly might be hard to keep consistent.
How Long will it Take to Learn to become a Specialist?
So by now you have probably decided what topic you are going to write, whether it is domain name companies, the utilities industry or even a geographic specialty in stocks from a given state or country.
The time it will take for you to specialize is difficult to determine. You could already be an expert on a given topic because you may have an advanced degree in the subject matter or years of experience in the industry.
If you are completely new to the topic it could take months or years to develop. Before producing any content for others to read, be sure to be confident in your specialty and ability to be discerning, not emotional.
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