Business-Oriented Investing 101: Patient, Prudent an Profitable

Business liquidity and success have always enjoyed a hand-in-hand relationship. Unfortunately, these two concepts rarely see eye to eye. While crowdfunding and attracting physical investors are both options, it is an undeniable fact that the associated results are often fickle and the funds themselves can take a significant amount of time to be realised. What additional options can astute business owners and similar stakeholders leverage? One interesting alternative comes in the form of online investing and if undertaken with acumen and realism, financial breathing room could be much closer than you think.

Let us look at some of the strategic benefits attributed to online trading as well as how technology now plays a game-changing role.Why Choose Online Investing?Online investing has undergone what can only be called a profound digital revolution during the past decade. Dial-up connections and basic interfaces have now been replaced with lightning-fast trade executions and mobile-friendly platforms. No longer will investors be forced to succumb to a decidedly bland office lifestyle if they hope to experience a respectable ROI. This is one of the main reasons why business owners who are looking to raise additional capital to support their B2C e-commerce operations are turning to the world of online investing.

Agility is no longer a concern and as a result, profits can be accrued within a single click.The other major advantage is that there are a host of lucrative underlying assets to select. Many of these represent conservative investment opportunities; ideal for business professionals who are not willing (or able) to place their existing capital under a disproportionate amount or risk. Some common examples of relatively stable categories include:

  • Market indices
  • Commodities
  • Contracts for difference
  • Spread betting positions
In addition to appreciable profit margins, some vehicles such as spread bets are not subject to capital gains tax. This is an obvious advantage, as any associated profits can be funnelled back into the daily operations of the business in question.While there is no doubt that these opportunities are alluring, we need to temper such observations with a flavour of reality.

No asset increases in value without taking losses from time to time. The markets will never rise in a straight and predictable line. These observations have caused some business owners to hesitate at the prospect of online investing. However, it is just as critical to realise that prudent strategies will make all of the difference in the world between obtaining much-needed liquidity and a portfolio that fails to perform.

What strategies can be employed and are there any habits to avoid at all costs?Enhancing Profits Without Sacrificing StabilityUnlike private individuals who are looking to enhance their so-called "side hustle", business owners are investing with the intention of long-term liquidity and stability. It only makes sense that they should adopt a more conservative trading outlook. Most professional wealth managers feel that no more than ten per cent of one's total finances should be allocated towards a given trade. This helps to limit exposure in the event that the investment fails to produce results.A diversified stance is likewise associated with success over time.

Placing all of your eggs within a single investment "basket" is a sure-fire way to lose a great deal of money within a short period of time. Healthy and productive portfolios are often comprised of a number of disparate holdings such as:

  • Commodities
  • Blue-chip stocks
  • Indices
  • Treasuries
  • Forex (currency) positions
You may have noted that currency trades were mentioned last. They normally represent a small proportion of one's total holdings. While potentially profitable, their inherent levels of risk should also be taken into account.

The other components such as blue-chip shares and commodities can be employed to offset the potential volatility associated with short-term Forex trades.Another trait shared by B2C business owners who enjoy success over time is that they are patient with their ventures. They appreciate the immutable fact that (in the majority of instances) massive profits will not be realised overnight. Mistakes will be made from to time and even the best in the industry can make the occasional error. The main takeaway point is that these instances should represent learning curves as opposed to setbacks.Online investing should become an even more prominent business strategy in the coming year.

While this is certainly not a logical option if you have no additional capital to spare, it can represent an excellent financial "springboard" to success should you possess extra liquidity. As always, maintain an conservative attitude and be realistic with what you expect to achieve. It is always wise to speak with a qualified accountant or adviser if you hope to better understand the options at your disposal.

Seth Johnson
Seth Johnson

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