Are you hell-bent on making a smart investment? Do you wish to fund a new entity, facilitate its growth through your financial assistance and sanguinely hope to enjoy a good ROI? You can realise your dream provided you take a measured approach and do all that a smart investor expects.
Here are the 5 ways to make a smart investment:
Follow a plan
Planning precedes action and always will. To make a smart investment, you need to do proper planning. Hastiness could cost you dearly. Think about the amount you are willing to invest. Also, assess the period of time you can agree to part with it. If you get solid returns, it will be your good luck but what if you just get the principal amount back and even worse, something less than you invested? You have to consider all these.
Draw on the experience of other investors
You learn from others’ mistakes and from their experience too. The internet today is rife with forums. You will surely find one where other investors must have shared their experiences. A little research here can help you arrive at a decision much faster. You will learn about the startups that are making waves, and if nearly a dozen investors have the same opinion about an up-and-coming venture, you can rise above your doubts and jump on the bandwagon.
Beware tall claims
Investing in a startup isn’t the same as putting money in a fixed deposit. No startup can guarantee a fixed return, and you need to be wary of one that does. The element of risk will always be there. Market conditions tend to fluctuate off and on, and any eventuality can cause share prices to plummet. So, waiting until the time is ripe for you to retrieve your investment along with a decent earning is advisable.
Do not be overly influenced by past performance.
This piece of advice may be contradictory in nature, but you need to consider it nevertheless. It’s based on the past performance of any new company that you form an opinion about it. However, relying solely on this parameter will not be wise. You have to see what the future aspirations of a not-so-old organisation are and how it is planning to capitalise on its success. For this, you may be required to meet the founders themselves, as they will be the best people to answer your queries.
Diversify your investment
This has been repeated repeatedly, not just for the heck of it. It especially holds true for those whose pockets are running deep. Why put all your eggs in one basket and incur a major loss if things do not pan out the way you would like them to? If you can learn about one emerging startup, you can surely inquire about a few others. Invest a little in each of them, and you never know – the returns can be truly rewarding.
Here’s hoping the 5 guidelines above stand you in good stead when considering making a smart investment.