Many businesses are fed up with the poor interest rates that banks are offering on deposit accounts. Sometimes they can be at a rate lower than inflation which essentially means you will lose money in the long term.
To avoid this and to make a better return on any spare profits, other forms of investment have become a popular alternative for business owners.
You may feel somewhat unsure about taking your first steps into the world of investing because of the risk factor. There is always an inherent risk in any investment and the sheer range of investment opportunities available can seem overwhelming.
Do not allow that to put you off. Many business owners invest profits to get decent returns in the sectors they choose. As with everything in business, it is mainly down to thorough preparation and some hard work.
Effective ways to enter the investment world
If you are looking for some simple and effective ways to get started as an investor then the tips below should help.
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Educate yourself – if you will be handling the investments yourself then you must know what you are doing. Take the time to research the various investment types and how the markets work in relation to them.
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Use the internet to hunt down online articles and videos to help grasp the basics of using charts and to understand all the terminology involved. If you have access to someone who already invests money on the markets, then speak to them to get a heads-up on what to do and what not to do.
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Write up a plan – when you started your business you would have written a business plan. When you begin investing, you need to do the same. This will make sure you invest money in a planned way with no emotion being involved.
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Your plan should include the type of assets you will invest in, how you will spot the best investments to take on and when you intend to exit each investment. It is also important to think about risk and what degree of that you are willing to take on as this will influence where you will put your money. Bonds for example are seen as lower risk generally than stocks.
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Find a reputable online broker – making investments as a business owner will generally mean using an online broker to make your trades. This is certainly the case if you will be investing in the big financial markets like currency, shares or indexes.
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Have a look around the internet for reviews of the various investment broker platforms and which are best to use. Once you have found one that seems a good choice, have a look around the site to see if you like it and that it is easy to navigate and use.
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Invest smaller amounts more regularly – this is a great tip for beginners that even the experts use. If you have allocated a certain amount for investment, drip feed the amount you invest over time rather than using the whole amount immediately on a single investment.
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Think about diversifying – another tip for those just entering the world of investments is to hold a diverse portfolio. This basically means not having all your money tied up in one company, sector or asset class. By spreading the money around, you will also spread the risk and help protect yourself from certain sectors decreasing in value.
Consider using a professional investment company
Of course, all the above is great but what if you do not have the time or inclination to handle your own investment portfolio?
As a business owner, you will no doubt have many other things to do, from marketing to important meetings, that take up your day. Many business owners turn to professional investment companies in this case to help find and monitor investments for them.
Companies of this kind include Coral Growth Investments (Parallel) Ltd which has investment guru Fahad Alrajaan on its roster of Limited Board Members. These kinds of companies are great at not only finding the best investments for you to make but also handle all the practicalities of investing for you.
Entering the world of investment for beginners
If you are looking to make your first steps into the investment world then the above tips are a great place to start. Whether you opt to use a professional investment broker to help or go it alone, it can bring superb returns when done right.
All businesses need ways of broadening what they offer and how they bring money in – investment is a key strategy to think about in that regard.
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— Will Corry (@slievemore) November 22, 2018