Investment tips for Small Business Owners

by Startacus Admin

Small business owner and thinking about how to make your money work better for you? These tips on investment should certainly help

Every small business owner has as a goal to be as successful as possible. However most focus on putting their all into their business, neglecting an important part of this equation – yourself.

To achieve real success, it’s important to invest surplus cash into your business but also yourself. Now that your business is on track, take the time to make money work for you; here is some advice on investments to consider.

Planning

Just as starting a business requires a plan, investment should require the same level of strategy. Do your due diligence and ensure these potential investments align with your business goals, debt load and financing ability.

Don’t simply gamble money away, make calculated decisions to avoid losses.

Penny stocks

As a new investor, this is a safe place to start your journey. Penny stocks are companies that trade with a low share price and it is a highly volatile investment. The fact that the low share price allows investors to have multiple shares for a considerably small amount of capital, makes this the ideal starting point.

Diversify

Diversification is central to any successful investment portfolio.  This enables you to spread your capital across a range of investments and asset classes, as you look to mitigate risk and minimise your reliance on single and potentially volatile instruments.

Let's say that you invest almost all of your capital in commodities, only to see this market depreciate considerably over a short period of time. Almost instantly, the value of your portfolio will plummet, leaving you with ownership of worthless assets that retain the vast majority of your wealth.

Rather, create a portfolio that includes both volatile and stable assets, while also considering alternative investment vehicles and flexible derivatives.

Seek Out Expert Advice

If you're relatively new to the world of investment, attempting to build a generative and diverse portfolio is far easier said than done. 

This is why you should seek out expert advice from financial advisors when starting out, as you leverage the experience of others to inform your decisions. This ensures that you can access tailored and effective services, which ultimately translate into diverse and flexible portfolios. 

Stay Updated

There are external factors that are likely to have an impact on your investments. It is important to understand that investments are very vulnerable to geopolitical and macroeconomic trends. Be proactive! Follow the latest news and trends to identify anything that might pose a danger or an opportunity. This enable you make decisions that are beneficial to you and your business.

This advice is a good place to start, but slowly building up your knowledge and adapting according to your needs and possibilities will ultimately lead you towards the best strategy for you.

 

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Published on: 2nd November 2020