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Tips for managing your business's investment portfolio

When it comes to investment portfolios many of us have a financial advisor that makes all of our decisions for us and all we do is look at our account statements once or twice a year. Having a financial advisor is great, but one of the problems that they face is the large amount of customers that they must answer to everyday. With having such a large amount of customers financial advisors are not always able to give each account the individual attention it needs, which means that you can miss out on some of the short term decisions that need to be made so that your investment portfolio continues to make money. So one of the best things that you can do is to manage your business portfolio on your own, but still use a financial advisor for those long term decisions.

Here are some tips for managing your business's investment portfolio.

Tip one:
The first thing that you should do in planning for a more secure financial future is to build a portfolio of investments that is completely different from your business. How you decide to divide up your assets and the individual investments you choose will depend on what you need to provide for yourself and your family. So when choosing investments for your business portfolio you are going to want to think about what your long range goals are or even short term goals. Are you trying to generate income for lifestyle needs? Are you accumulating a nest egg for retirement? Trying to build wealth for future generations? Or any other reasons that you might have. The reason for this is what kind of investment decisions you make when it comes to your business's investment portfolio will rely heavily on what you are wanting to see happen in the future.

Tip two:
Since you are a business owner you already know that a lot of your wealth is tied up in your company's assets. But what you might not know is that because of this you are going to have to approach investing differently than regular people do, regular meaning people who do not own a business. In fact what you are going to need to do when building a portfolio is to build a portfolio that moves independently of your company's business cycle. The reason for this is that you are trying to reduce the risk associated with large holdings of generally illiquid assets. Basically what we are saying is that your investment portfolio shouldn't mimic what your business does.

Tip three:
Even though it might be natural and convenient for you to invest in things that you already know, in other words businesses that are similar to yours, this is something that you are going to want to avoid as much as you can. You can invest in companies that are similar to yours but when building your portfolio you are going to want to include other investments just in case, basically what you are going to want to do is to diversify your portfolio. The reason for this is that if your industry has a down turn, not only is your business going to be affected but so is your outside investments. What you are trying to do is to protect yourself from this kind of situation by investing in a large variety of stocks or mutual funds.

Tip four:
Another thing that you are going to need to do is to become familiar with each stock that you have in your business portfolio. The reason that you need to become familiar with each stock that you have in your business investment portfolio is that you are going to need to be able to make any short term decisions about each investment. So what you are going to want to do is take a look at each investments balance sheet and income statement, as well as certain other statistics, so that you know what the investment is doing currently and can judge what it might do in the future.

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