iBankCoin
Home / Tag Archives: Investing Strategies

Tag Archives: Investing Strategies

Small Business Investment Tips for Doing Well in the Stock Market

Small businesses should take advantage of investing more as they start to accumulate profits. Investing can provide added capital over time that can make it easier to take advantage of opportunities that come up and facilitate healthy cash flow.

The following are six important tips to keep in mind if you’re using small business funds to invest and grow capital:

 

Take advantage of penny stocks in order to get started

In the early days, it’s a good idea to look into penny stocks because they don’t require a significant investment but they have a lot of potential in some cases. Investing in penny stocks is probably not going to make you rich, but it could help you to learn the ropes of investing. And don’t forget that some people have made a fortune from penny stocks. Just a few examples of one-time penny stocks that hit the big time include True Religion Apparel, Medifast, and Mylan Pharmaceuticals.

 

Try to incorporate investments into your own business interests

The best way to invest for small businesses is to invest in such a way that long term business goals are worked toward through investments. Before making any type of investment, it’s a good idea to look at your long term goals and how you could use any available investment funds to meet those goals. In particular, you may want to do research on how a bull call spread can benefit your market to get some low risk chances of benefiting your business interests.

 

Avoid going overboard on a particular investment

One of the most basic rules of investment is learning to diversify. A lot of times, fledgling investors are tempted to put all their eggs in one basket because they have a real hunch about a particular stock or investment. However, going overboard on a particular investment creates a lot of risk. You need to diversify because, while one stock or investment may turn out to be a lemon, they all won’t. Diversify your investments so that you spread the risk out. This will give you the greatest chances for success in investing generally.

 

Be aware of the potential that mutual funds offer

Mutual funds offer a great opportunity for beginning investors to make some money without having to take great risks. When you are unfamiliar with the world of investing, you want to minimize risks in order to minimize losses. Mutual funds involve investing money into hundreds of stock so that risks is spread out without you’re having to make any decisions or conduct any analysis on what you’re specifically investing in. Mutual funds generally allow your investments to grow slowly and to weather the vicissitudes of the market well even though you’re not a very experienced investor.

 

Be patient

One of the number one rules you need to remember about investing is that you’re almost never going to get rich quickly by investing. This means that you need to bide your time and be patients about returns on investments in the stock market. Stocks that are good investments will go up little by little each day.

However, stock market investments won’t increase significantly in value immediately so you’re going to have to sit back and watch. Patience in investing leads to the greatest successes. Remember that stock market investment profits are passive, so even if they take time they don’t require upkeep or ongoing effort.

 

Invest strategically to minimizes fees and taxes

There are often a lot of fees that go along with making investments on certain trading platforms online. You’re also going to have to pay taxes on any investment earnings your company has.

It’s important to analyze the expenses that fees and taxes will involve and invest strategically by being aware of what it costs and what it will cost to make your investments.

Comments »

Increasing Your Portfolio Across Borders

Unless you live in a cave, globalization hasn’t escaped your notice. While international trade has flourished, so has international investing. In the old days, international investing was a realm for wealthy and professional investors. It was risky and expensive. Besides, the U.S. was by far the world’s biggest economy, and investing here was better.

In 2017, investors who said that had to eat their hats. Using the S&P 500 as the domestic benchmark, U.S. equities rose by 21.83 percent. That’s not bad, but consider this: The MSCI ACWI EX US, a measure of the world’s stock market performance excluding the U.S., saw a gain of 27.9 percent. Europe, Asia, and the Far East recorded gains of 25.03 percent. Emerging markets enjoyed a stunning 37.28 percent rise.

For international stocks, the party is far from over, according to Nicole Coombes and Paul Fortin, due diligence analysts with Boston Private. “We are particularly bullish on international equities right now. They had a strong year in 2017, and we think that’s going to continue,” explains Coombes. If that prediction holds true, investors have a lot to look forward to in the international sector. Coombes recommends always having a piece of the international market. Here’s why:

1.Diversification

A well-diversified portfolio in today’s era needs to include more than U.S. investments. Investors need to hedge all sorts of risks, including to the U.S. economy and the U.S. dollar.

2.New opportunities

International markets, especially emerging markets, are full of fresh investment opportunities. Gains from fast growing economies, privatization, and loosening trade barriers are projected to continue far into the future.

3.Attractive valuations

No matter how good a company or its products, its stock has to be valued right to be a good investment. The international markets provide much larger opportunities for value investing.

Avoid country bias

American investors have 75 percent of their equities in American companies, even though they own 53 percent of the world’s stocks. This shows a definite bias towards U.S. stocks. Why?

Americans are familiar with American companies. They know Amazon, Microsoft, and the other S&P 500 components. Overseas companies are unknown, but they are where opportunity lies.

Equity prices in the U.S. stock market are looking expensive. Even with some recent pullbacks, the P/E ratio of big U.S. companies, and the valuation of the market itself, are far above the international average. With these high valuations comes the specter of a bubble not seen in international stocks.

Another reason U.S. investors shy away from international equities is a false sense that international investing is too complicated. The real problem may be more in line with international markets being unfamiliar. Though investing in unfamiliar territory causes some justifiable reticence, a ready solution is close at hand.

International stock funds take all the guesswork out of investing overseas. Professional money managers pick the best values, after countless hours of research, so you don’t have to. This takes away the problem of having to worry about investing in something you don’t understand.

The fund managers understand these markets. With the incredible performance of many international markets and their values still remaining low, international funds stand to outpace their U.S. counterparts for years to come.

Increase your profits with options

Options are a great tool to increase returns in flat markets. With the U.S. market seeming to slow down, it’s a good idea to branch out into other investment vehicles. One way to use options to capitalize on placid market waters is through a bull call spread strategy.

This spread involves purchasing a call option and put option on the same stock with the same expiration date, as Investopedia explains. Because volatility is expected to remain low until the expiration date, there is a high chance that the stock price will fall between the strike prices of the call and put. In that case, the investor profits from both positions.

Comments »

Investment Tips before Investing In Private Companies

Investors seeking to invest in private companies will admit that it is not an easy decision, owing to the risks involved, long-term investments and liquidity issues. Whether you are investing in a private company for the first time or you have invested in over 100 companies, it pays to learn the basics so that you don’t make mistakes. For starters, you need to understand what you want to gain from the investment, but don’t primarily focus on making money. Investors seeking to invest in companies should pursue projects that they are familiar with, have a passion for, and have background knowledge on so that they can easily make more money. Besides, investors should also consider these other things before investing in companies.

 

Have diversified strategies

You are not likely to be a successful investor if you put all your money in only three or four companies. Studies reveal that successful private investors invest in between seven to ten companies. In fact, angel investors have about nine years of experience, and they have an average of one investment per year. Therefore, you should identify the amount of money you plan to allocate to that class so that you can diversify your investments to increase success odds and reduce risks.

 

Talk to customers

You need to get more customer data so that you make the right investment decision. In fact, you should talk to not less than five customers who use the service or product. It will enable you to understand from the first-hand users of products or services the void that the brand fills as well as what they like about it. When talking to them, find out if there is an alternative product or service that they would use in place of the product or service. You should find out if they would still use the brand if competitors drop the prices, why they would or would not consider using another product so that you can gauge their loyalty to your product. Most importantly, find out from the customers if they can refer other people to use the product. Investors should pay attention to the kind of customers that the company has, and they can feel safe if the customers promote the product.

 

Know the exit strategy

You should understand the exit scenarios of the sector that you want. Consider how big the company needs to be and the margins so that it can go public or have an attractive acquisition target. Also, you should understand the options available to you as the investor when buying or selling specific underlying equity. Investors can be a short or long put strategy based on the rights to sell the specific investment.

 

Talk to an expert

Investors should talk to experts in the sector that they have interest in, to get advice on various issues such as the viability of the industry. You can look for financial experts in that sector rather than in other sectors because the later might not be knowledgeable in your business of interest. Also, you should ensure that you talk to an attorney so that you know legal requirements such as legal documents when investing in private companies. Let your lawyer see all the documents to get feedback. Investors should understand their lawyer’s points even if they don’t care about them.

 

Know the deal

Investors should know how the deal structure and the company’s valuation stack up against other companies in the sector. They need to consider the valuation relative to other companies depending on several factors such as growth rate, capital structure, revenue, risk profile, and net income. You should avoid companies with a high valuation.

 

Understand the business

Investors should invest in what they know, which means that they should use their products or services before they invest in the industry. An investor who understands a business has more confidence in the investment than one who doesn’t know about the company. Besides, you cannot invest in a tech business when you don’t have a tech background. You should understand tech trends and how technology is affecting various industries among other pressing issues before you invest in the tech business.

Comments »