Invest, Then Investigate

Dictionary Says

Definition of 'Invest, Then Investigate'

An investment strategy where investors purchase a stock first and do research and due diligence second. Invest, then investigate - or investing first and researching next - is a risky and speculative approach to making investment decisions. This method is often used by individuals who have either an unfounded hunch that a security's price will move in a particular direction, or who are acting on impulse. Any research or due diligence is performed after the position has been opened and the individual decides to either hold or close the position. This is the opposite of the "investigate, then invest" approach to investment decision making.

Investopedia Says

Investopedia explains 'Invest, Then Investigate'

Some investors may utilize this strategy to "test the waters" of a trade. If the position is profitable, they can add to it and potentially increase profits; if it is unprofitable, the position can be closed for a loss. Famous investor George Soros is known to invest first and investigate later to avoid missing rapidly changing market opportunities. Many investors would view this method of investing as gambling and prefer, instead, to investigate potential positions first and then risk money to test the theory (investigate, then invest).

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Due Diligence - DD

    1. An ...
  2. Speculator

    A person who ...
  3. Due Diligence Meeting

    The process of ...
  4. George Soros

    A famous hedge ...
  5. Trading Strategy

    A set of ...
  6. George Soros

    A famous hedge ...
  7. Trading Strategy

    A set of ...
  8. Speculation

    The act of ...
  9. Arbitrage

    The simultaneous ...
  10. Arbitrageur

    A type of ...

Articles Of Interest

  1. Taking A Look Behind Hedge Funds

    Hedge funds can draw returns well above the market average even in a weak economy. Learn about the risks.
  2. George Soros: The Philosophy Of An Elite Investor

    George Soros spent decades as one of the world's elite investors, and even he didn't always come out on top. But when he did, it was spectacular.
  3. The Greatest Currency Trades Ever Made

    These speculators took big positions - and scored huge profits - in the currency market.
  4. How did George Soros "break the Bank of England"?

  5. The Greatest Investors

    Read about the achievements of those who have mastered the art of investing.
  6. Speculating With Exchange Traded Funds

    More and more investors have been drawn to the often volatile ETFs. Learn how you can use this instrument for big returns.
  7. The Art Of Speculation

    Speculators believe that the market overreacts to a host of variables. These variables present an opportunity for capital growth.
  8. The Currency Market Information Edge

    Unique features of the forex market may allow larger players to get a jump on smaller ones.
  9. Credit Default Swaps: An Introduction

    This derivative can help manage portfolio risk, but it isn't a simple vehicle.
  10. Getting Started In Foreign Exchange Futures

    Learn how these futures are used for hedging and speculating, and how they are different from traditional futures.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center