Guest post by Young
Although it is practically impossible for one to be 100 per cent infallible in predicting a good or bad investment, it is possible to narrow down the playing field by following basic principles while investing. Experts note that this will help ensure beginning or advanced investors a margin of error when investing their funds for a good return earning. It is therefore important for an investor to adopt the basic principles of making good investment decisions if he wishes to trim his risks and make considerable progress in his venture.
Business professionals say whether it is cheap insurance, good insurance or just plain savings bonds, in today’s unstable economy one cannot ever be 100 per cent certain in investing. They, however, note that choosing wisely will definitely be an asset in achieving success or avoiding financial disaster and cutting the risks. Below are simple tips to making excellent investment decisions in an unstable economy.
Take enough time to think
At the moment, third world economy is unstable and harsh to businesses. Businessmen, in separate interviews with this correspondent, often complain of the unfriendly economic policies which they have to contend with in order survive. As a result, they note that whoever wishes to invest in the third world must take enough time to think through what venture he plans to dabble into. According to experts, whenever one has made the decision to invest a certain amount of money, the first thing that needs to be established is that it will take time to devise the following principles and a subsequent financial strategy.
Investing in one’s future is definitely not something to just plunge into without careful thought and consideration. Experts say the lightning-fast nature of the Internet is conducive and geared towards convincing surfers to make quick and impetuous decisions. Consequently, this fact needs to be on one’s mind continuously before making any investment decision as any error might be regretted. Of course, no one loves to regret in business.
How much risk can you take?
You should know how much risk you are willing to tolerate in whatever business you do. Knowing the difference between an average savings/money market account and investment vehicles which form part of a portfolio is vitally important when making successful investment decisions, experts say. So as an investor, are you ready to take risks? Calculated risks should be taken in business to succeed. Every form of investment has its associated risks, and any investor should be ready to undertake such risks, but shrewdly.
Never give up easily
Do not succumb to pressure in business. You must understand that every business has its own pressure and it is not wise to give up easily after encountering some challenges.
Generally, families, friends and the shoe-shine boy on the street will all offer financial advice. Most of it will not be qualified, expert advice. Most of them will know of a cheap insurance policy, promising stock or a well-performing company that has good future potential. Whatever they may advise or try to push, in order to avoid bad investments, it is crucial for a person to not succumb to outside pressure. Put in your best and be wise.
Undertake detailed research before investing
Experts advise that in today’s highly volatile, economic environment, it is primordial to carefully research a particular financial vehicle which carries out one’s financial goals the most. Meticulously checking out the specific investment offers, competitive offers from other sources and how well the investment is performing is a crucial prerequisite. You should ensure detailed research before investing in any form of venture.
Also important is to painstakingly research the reputation, integrity, and track record of the financial institution offering the investment. Experts say this is just as important as the investment itself. Some of the basic tips for this include taking time to implement a savings and/or an investment plan with a diversified portfolio; determining how much risk one is willing to assume: research which investments are insured, non-secured and/or low-risk; and never bow down to friendly advice if it does not adhere to your short, medium or long-range goals.
Are you adventurous?
Many of our entrepreneurs want to sit in a place and expect things to work out fine. Experts notes that you must have a dream and that dream must influence your entrepreneurial vision. “The moment you have that dream, you should understand that it doesn't come easy, you must drive it. What do I mean by driving it? It is not going to be easy. So how do you as an entrepreneur identify your priority? Even in the face of making it, when the returns begin to come in, how do you determine your priority? Do not forget where you are coming from? What informs your taste? You have to be adventurous. When people talk of lack of funds, I laugh. You see, when you talk of lack of funds, I see it as the least of all your problems. The idea that you want to develop as an entrepreneur is key and paramount.”
You need to diagnose the efficacy, relevance, workability and feasibility of your idea. These are the issues that many entrepreneurs tend to push aside and they begin to talk about the issue of funds. “People talk about issues of policies and infrastructure, but these are only essential and secondary, they are not primary,” As an entrepreneur, you must have the drive and understand your dream and idea.
The key question is, “Why are you in this business? Can you explain or is it because your brother, sister, or uncle is doing it? No! If you go into business because of that you have messed up everything and your problem starts from there. So when you have gotten your idea right, you can now talk of money or funding.”
In the next post, let us talk about involving your spouse in financial decision making.