Product creation could be a frightening subject for a lot of Internet marketers to face. Some folks who get in the game with the intention of making a full time income are completely ignorant as to how an online business operates. One of the most profitable ways to create online cash is by creating a product that others are happy to pay for.

Product creation is legitimate method of generating money through internet marketing but many entrepreneurs get it wrong. They start by imitating their Internet marketing gurus by creating information products on Internet marketing in hopes of getting rich the way their heroes did. The problem is that they usually don’t know what they are doing and enter a highly competitive niche with very little marketing experience or connections.

Here are a few tips for effective product creation that may help you get on the right track:
Start by finding a profitable niche with low to moderate competition. If you conduct some rudimentary market research and keyword research, you’ll find many opportunities in areas that will surprise you. Amazon and eBay are two great places to brainstorm for product ideas.

Developing Your Product does not have to be a difficult project. You can find experts in the right field for your niche and pay them to write the material while an artist designs the packaging and website or blog. You can outsource the entire product creation part of the project after you conduct the research and testing to ensure profitability.

Sales and marketing strategies should be created while developing the product and learning about the market. Some experienced marketers use pay per click to drive traffic to their offer page; some folks outsource the entire marketing campaign to affiliates through ClickBank or other affiliate programs.

Product creation does not need to be hard, particularly when the merchandise is electronic. E-books, videos, audio and multi-media products sell very well. They are distributed immediately to customers electronically. Once you have a good feel for a niche market, try to service your customers with associated products and upgrades. If you want to earn money online through product creation, you must understand supply and demand. The majority of new online marketers fail miserably because they go after highly competitive markets or forget to research their chosen niche properly. You have to create your products according to the needs, wants and desires of the prospective customers.

What worked prior to 1995 for investors, no longer works in our “New Age of Investment Bubbles” we as investors find ourselves in these days.

If you as an investor manage your own employer-sponsored 401(k), Roth/401(k), 403(b), or other retirement account, or leverage a Buy-and-Hold strategy to build long-term wealth, or choose to hire a financial advisor/professional to manage your money… your investments are not protected from the massive loss of wealth that will occur when the next and all future bubbles bursts.

In this article, I’ll focus on:

Why a Buy-and-Hold strategy is dead in today’s “New Age” of investing.
Why protecting your wealth must be your #1 priority.
The “New Age of Investment Bubbles”

1995 ushered in a whole new era of investing that the vast majority of today’s investors have yet to recognize and adapt to. Investors have been mislead into believing that what worked in the years prior to 1995, is still relevant in this “New Age” of short-term irrational speculation, or gambling, or chasing what’s “hot.”

This “New Age” is built on investment bubbles that burst wiping out trillions of dollars of investor wealth and making it impossible for investors to ever realize their lifetime wealth potential.

If you’re not familiar with the S&P 500 index, the most widely held and measured stock index over time, I recommend you check out the link below to get a quick visual representation and historical perspective. I’m confident you too will agree that 1995 was a year something dramatically changed and altered the landscape of investing.

Please don’t be mislead or fooled by a financial advisor, your parents, or friends that what has worked in the past, will work in this “New Age of Investment Bubbles.” It certainly didn’t stop the massive loss of investor wealth during the Tech and Housing bubbles when those bubbles burst, and there’s no reason to think this “New Age” is going to change anytime soon as it has enriched and built massive amounts of wealth for Wall Street, investment banks, the financial services industry and all those working in them… just not for we the “average investor.”

Why Buy-&-Hold Is DEAD!

Buy-and-Hold is… no was… a great long-term strategy prior to 1995 when markets were rational, as it was easy to manage, it removed all emotions from investing, and had a proven track record of success over many decades. This strategy however, is no longer relevant or prudent in today’s “New Age” and a little math and the S&P 500 are all that are needed to prove why Buy-and-Hold is dead!

As a Buy-and-Hold investor, you’re taught that to build long-term wealth you only need to stay invested in the markets 100% of the time so you capture all the upside potential during extended Bull Markets, while weathering the downside of Bear Markets. Let’s see how this strategy has worked in this “New Age.”

If you started with $100,000 invested in the S&P 500 at the beginning of the Tech Bubble on January 1, 1995 and stayed invested 100% of the time, your investment would have gained 115% during its Bull Market and weathered a loss of 50.8% during its Bear Market. At the end of the Tech Bubble, your initial $ 100,000 investment would have grown to $105,780, nothing to write home about after 7 years.

The Housing Bubble immediately followed and its Bull Market gained 105%, or just barely enough to recover the 50.8% loss. When the Housing Bubble burst however, the loss was 56.8% and thus your initial $ 100,000 investment as a Buy-and-Hold investor, would now be worth $ 93,679 after 14 years for an annual rate of return of -0.46%.

This is the exact reason why so many Baby-boomers are having to consider delaying retirement, supplementing their retirement income with a second job, or even worse, taking greater risk with their investments in a futile attempt to earn greater return in this “New Age.”

Consider the Current Bubble we’re in. As of February 28, 2014, the S&P 500 had gained 175% during our current Bull Market, increasing the value of your $ 93,679, to $ 257,617 for an annual rate of return of 5.06% since 1995. But don’t forget, all bubbles burst and today’s Current Bubble is no exception. Assuming our Current Bubble will follow the trend of the Tech and Housing Bubbles, it’s not hard to fathom a 50% loss. Based on such a loss, your initial $ 100,000 investment will be worth $ 128,808 after approximately 21 years, and that $28,808 gain in wealth would equate to an annual rate of return of 1.21% in this “New Age of Investment Bubbles.”

No investor will ever build long-term wealth at that rate of return!

RIP Buy-and Hold… or till we meet again!

What’s An Investor To Do In This “New Age” To Build Wealth?

Investors must recognize the biggest challenge and most important factor to building long-term wealth in this “New Age,” is in how to protect the value of their investments from the massive loss of wealth when bubbles burst. Protecting wealth must be an investor’s #1 priority if they ever want to build long-term wealth.

Protecting wealth today requires a unique approach that minimizes these massive and devastating losses of wealth when bubbles burst. To do such, investors must simply learn when it’s prudent to get out of the market when a major market meltdown is occurring by moving their investment(s) to the safety of cash or a cash-equivalent position. This is not difficult to achieve but it cannot be accomplished with any degree of success by guessing when to get out of the market, counting on your emotions to tell you when you’ve lost enough money and it’s time to get out, or by listening to friends and/or co-workers.

The only way an investor can successfully protect their wealth in today’s “New Age of Investment Bubbles” is by integrating a simple, yet highly disciplined strategy that leverages pre-determined entry and exit triggers or indicators.

Pre-determined entry and exit triggers work like this. Once a bubble burst, a pre-determined exit trigger would tell an investor shortly after the meltdown has begun to sell their investment(s) and move their money to cash or a cash equivalent investment, and once the meltdown is over and the markets have begun to recover, a pre-determined entry trigger would tell the investor it’s safe and prudent to buy back into their investments so they capture the upside potential of the new Bull Market so they can build wealth.

Academic studies prove a strategy of this type removes the guesswork, emotions, and noise for investors in trying to time the markets, reduces overall portfolio risk and volatility, protects wealth from the massive market meltdowns when bubbles burst, and ultimately, provides the added benefit of improved annual rates of return.

How does a strategy using pre-determined triggers compare against a Buy-and-Hold investor in today’s “New Age?”

Let’s assume a worst case scenario that after a bubble burst, a pre-determined exit trigger gets an investor out of the markets after a loss of 25%, and gets an investor back in after the markets have gone back up at least 25%. In essence, our entry trigger lags a market recovery and misses out on the first 25% of gains during a Bull Market, but our exit trigger minimizes the overall market losses when a bubble burst or during Bear Markets.

After the Tech Bubble, an investor integrating a pre-determined trigger strategy would have seen their wealth grow to $ 142,500 versus the $ 105,780 for the Buy-and-Hold investor. After the Housing Bubble, the investor using triggers saw their wealth grow to $ 192,375 versus $ 93, 679 for the Buy-and-Hold investor, and after the Current Bubble bursts, $ 360,702 versus $ 128,808. The $360,702 amount of wealth for the investor using triggers would have realized an annual rate of return of 6.30%, versus 1.21% for a Buy-and-Hold investor.

To see the detailed comparison of a Buy-and-Hold investor versus an investor using pre-determined triggers, please check out the link below.

What’s important for investors to understand in the examples above are not the absolute numbers, but the power of using pre-determined triggers with their investments to build and protect wealth in this “New Age of Investment Bubbles.”

One of the keys to succeeding in information product creation is to break the process up into discrete steps. This frequently isn’t an instinctive reaction for the typical information marketer. Especially on the internet where small sized learning products are the norm.

However, it is extremely important to your ultimate success. In fact, I would go so far as to say that if you don’t do this you probably won’t succeed… even when you are starting out let alone as you move forward.

Your product creation system should do this for you if only to help you to understand the overall task.

But why?

In this article, I’m going to ignore chunking and focus on the practical aspects. That’s not to say that chunking isn’t important. It is. It’s important to understanding and to learning the process. But while you can use the same chunks as you move forward, long term your focus needs to be on the operation of the system not the understanding of it. Unless of course you are constantly training new people!

So why is chunking important to long term use of the product creation process? (Yes, I know systems design uses a different term for this process but I’m not teaching you systems design. So I’m going to use the word learning content designers use.)

The first reason that having individual discrete tasks is important is one of schedule estimation. Frequently it is very difficult to estimate how long the total task of creating a product will take. After all, the size and type of the products matters as does the number of products in your product funnel. And those are just the most obvious elements. However, estimating a discrete task is often much easier. The total can then be estimated as the total of the discrete tasks.

Secondly, scheduling a large task can be problematic. However, by segmenting the task into a number of discrete tasks, you gain a much greater flexibility in scheduling. Not only that but as your business begins to add people you are able to schedule multiple people to the product creation.

Finally, segmenting a large task into smaller discrete tasks allows you to have much better control over the product creation. This affects two different areas — status and quality.

By segmenting your process into discrete tasks you are able to schedule and record the progress at much more detailed level. As a result you are more in control of the status of the product creation. You know what everyone is doing. When they should complete it. And how much it should cost. You also know exactly what has been done.

You also improve your overall quality. Instead of waiting until everything is done you can check quality as you go. This allows you to immediate react to low quality products without absorbing their costs. This means that you have less rework and your rework costs less. And if the product is not going to meet its quality requirement you will know about it in time to stop the development, change the requirement or fix the product.