Become the Donald of Gielinor: Long-term Investing

May 2016

When flipping–both passive and active–has been mastered, when you can invest your gold profitably and consistently in the short-term, the only bastion of gold-making that remains is long-term investing. That and getting enough fake tanning to permanently turn your skin orange.

While investing in the short-term, you’re concerned with looking at items which are undervalued at the moment and stand to rise in price in the next couple of days, the mindset required to profitably invest long-term is different. You should look for items with good long-term potential.

The last thing you should do is buy an item that “seems to be pretty low” without understanding WHY its price is so low. Usually, there are good reasons for such drops in prices. While passive flipping is done using more expensive items, with short-term investing even more so, long-term investing is usually done with even more expensive items. It’s not a stretch to pay millions for a single item you plan to sell later. With such a huge investment, you MUST take steps to minimize risk of losing gold.

The YouTube channel Merchz provides us with these questions to ask yourself before you invest in an item:
1. Do bots impact the item?
2. Limit per 4 hours vs. potential profit?
3. Can your item be made less relevant?
4. Is it easy to liquidate the item?

Concerns about the impact of bots is valid because items formed by bots usually are in a state where supply outstrips demand, resulting in falling prices. If the price of an item always falls or stays the same, there is no way to make profit on it.

Another matter to consider is the number of these items you can buy per 4 hours opposed to its potential profits. For example, if you could buy item A 10 times every 4 hours and make a profit of 10,000 gold coins each, it wouldn’t be worth the effort, would it? The same stays true for real items too.

Changing relevance of items is mostly due to upcoming updates to the game. For example, if Jagex announced that Scrimshaws are going to be removed from the game or vastly nerfed in two weeks, buying them would be a really bad idea, because everyone and their grandmother would start selling them, making their price drop like The Donald’s wig in a hurricane.

Finally, you should consider how easy selling the item you’re interested in would be. If you’re wondering why, just consider this scenario: You are holding on to 5 Items of Great Potential, hoping to sell them for a tidy profit. While looking for profitable items, you notice that there’s this item–let’s call it Item of Exorbitant Profit– which would make you… exorbitant amounts of Runescape gold. Problem is, you don’t have enough free money to complete a proper move. In that case, you could sell your Items of Great of Potential to generate enough money for that more profitable move. It’s all well and good, unless your Items of Great Potential don’t sell well at all. Then you’re Trumped, aren’t you?

Hopefully, you now have more of a clue concerning long-term investing and how it should be done. These matters are practical in nature, the only way to get genuinely good at making gold in the Grand Exchange is to try it while learning from your experiences. Getting a small loan from your father helps, tho. Just don’t go buying any Miss Gielinor contests and we will see you later.