Smart Investments for Small Businesses

bulram | November 21, 2012

Investing is definitely a skilled art, an art that we would all love to master. In terms of investments for small businesses, though, it can be a great way to diversify your assets and include interest in your monthly cash flow. The key to investments for small businesses is to be smart and follow Jeff Brown’s advice, “keep it simple, spread your eggs among many baskets, keep fees and taxes low and tilt the odds in your favor with indexed mutual funds and exchange traded funds.” You can be risky in many things regarding your small business; investing shouldn’t be one of them. When it comes to smart investments for small businesses, remember, simple is always better.

As passively managed funds, Index funds can be great, smart investments for small businesses as they carry much less volatility considering they are intended to mirror the target index itself. While true, index funds won’t give you extremely high returns, they have much lower costs, taxes and risks involved, earning you usually consistent, stable rewards. Furthermore because they are passively managed, they require minimal attention time on your end-meaning, yes, more time you can devote to your business. As J.D. Roth smartly points out in his “Get Rich Slowly” Blog, “[Index Funds] are boring investments. When it comes to investments for small businesses, allocation is everything-well maybe not everything, but it is pretty darn important.

Asset Allocation is essentially the diversification of ones investment portfolio into various assets, or better yet the percentage mix of stocks, bonds and cash in your overall portfolio. Cash in a savings account, while safe, yields practically nothing. Diversity in your stocks themselves is also a must and a great way to mitigate some of the risk inherent within investments for small businesses. You didn’t create your business over night. Good things take time, and the same is true with smart investments for small businesses. Sometimes time is truly on your side.

Smart investments for small businesses are anything but haphazard. When investing becomes impulsive, chaotic and disorganized that’s when it poses much greater risks, both for you and your small businesses. Good Safe Rewards Investments for small businesses, if done smartly, are a perfect way to secure your money, while at the same time generating much better returns.