The two most important elements of investing are to be aware of prices and price trends, and also how recent updates or general trends in Runescape are affecting the market. Following are some investment strategies. However, as with all investments, there is never an absolute guarantee for profit or loss!
A common misconception is that a good investing strategy is to buy items that are going up in price. It is true that this is sometimes effective, but prices always fluctuate; in other words, price increases are always followed by price decreases, and vice-versa. These often are of a magnitude of several days each, but can be longer. In general, it is not a good idea to invest in items that have already been going up in price for a long time; rather, invest when the price is still falling but when you think the price will start rising soon, or invest very shortly after the item has started rising.
Carefully watch the price of an item and sell it when the price starts going down or begins to level off. Ideally you would sell while the item is still going up in price, the day before the price reverses and item starts going down in price. However, it is not always easy to predict exactly when this will be. Players may want to explore the Runescape Grand Exchange on the Runescape website to examine price trends. Players may find the Grand Exchange Market Watch helpful, although the Grand Exchange Database can be even more helpful, and the prices are usually up to date.
Be aware that there are price manipulation clans which will artificially try to raise the price of certain items. They will continually buy an item until the price goes way up, then they will all dump the item, causing the price to crash. When the crash happens you will have no advance notice and you will be unable to unload your items even at minimum as the market will already be flooded. This form of manipulation is known in the real world as a "pump and dump" scheme. Be aware of this scheme and when you see a common item going way up for no discernible reason, be very cautious of investing in it.
Another good way to invest is to read the RuneScape news found in the homepage of the website, and look for new updates or hints of new updates. For example, the release of PvP worlds resulted in increased demand for sharks, swordfish, runite items, dragon daggers, Dragon scimitars, and other popular player-killing equipment and supplies. Those merchants who had seen this coming and stocked up on these items before the update would have made quite a substantial amount of profit. Another good example is rares: before the holidays, people like to buy Santa hats. They will almost always go up in price in the weeks leading up to Christmas, or at least the prices will fluctuate more. Richer people will buy some of these, and sell them once they go up. However, due to a popular perception that Santa hats would be worth the most on Christmas, Santa hats have been known to crash before Christmas as players' expectations did not live up to the reality. In 2008, Santa hats started crashing several days before Christmas.
Those who want to do some very long term investing may not be concerned with small price trends, but rather should hold onto an item for months with the hope of a large profit. For example, dragon bones were worth about 1800 coins each in December 2008, but as of December 2009 were worth about 5000 coins each. Also, prices of discontinued items seem to reach an annual bottom in late March or the middle of April, but then rise during the summer.
However, if you are thinking of investing a large sum of your cash, it may be worth it to research the general price that most of the items will stop going up or going down at. If you don't you may be at risk to lose large sums of money. Rares, however, exhibit very low trading volume, which makes them risky short-term investments. Unless very familiar with their price trends, trade in items that are in better supply than rares.
