Posted on Dec 4, 2016
I'd like to invest in a business, but have no idea where to start. What do I need to do in order to invest?
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Posted 8 y ago
Responses: 5
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A novice should not invest in a single business. Best to go with a good S&P 500 index fund. Neverhave all your eggs in one basket. Put as much as you in the fund, while learning about investing. If you track performance of index funds to all others, they are competitive and have low to no fees.
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MCPO Roger Collins
ENS (Join to see) - Unless you know someone personally that has done well in the market to advise you, their main concern will be to separate you from your excess cash. Keep on with matching TSP. Have you looked at the price per sjare pf Apple or Google? The high price stocks are normally purchased by institutional investors and wealthy investers. Check the radio listings for Bob Brinker, much my successful investments are due to his advice.
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PO1 Tony Holland
ENS (Join to see) - Unless the opportunity is already publicly traded it is very difficult to get in on the ground floor.
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PO1 Tony Holland - And the IPO's are usually reserved for insiders and preferred clients. The brokerage houses financing the offering usually gobble them up. Usually best to wait and see if the enterprise lives up to expectations before buying in secondary market, especially with the .coms. Many learned this the hard way in 80's when the bubble burst. I fell for it with Qualcomm not fully understanding the industry and how it worked. Another example was Applied Materials, that there would always be need for chip manufacturing equipment. Luckily I didn't have that much in QCOM but it ended badly. All because I bought into the hysteria and concept of "nowhere to go but up". Market makers pump and dump and they do fine, but the small guys a.k.a. weak hands finance their gains. Best friend for someone young is time. Pick some keepers and use periodic buys to dollar cost average. Over time patience will pay off. The opposite is "chasing returns" or trying to time the market and for every boom there's a bust.
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PO2. George, go to Yahoo Finance and read and read everyday. The Morley Fool gives good tips and usually list the good stocks. It also depends on if you are looking for dividends or growth. But by all means talk to a broker, but you still have to be careful. The more trades he makes to more it cost you. I have one I would recommend, but it a little on the high side. It would be AFLAC insurance. Look at dividend history and growth. Look where the company stands in ranking. If it ever splits I will take about 10 k and buy more. Also USAA and Vanguard or good. My 401k has been with Vanguard and I did't lose any when things went south. Just be care and I know when I have reached my limit. There are people in RP that make a living doing this stuff.
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Whether you're considering starting a business or just investing in one, you're in the right place. Plenty of people here have a a wealth of knowledge. I'm sure there are lots of sites that can break it down step by step but many here have actually done it. There's no substitute for experience with things like this and they can likely shed light on the right courses of action. Unless you have a ton of money then investing in a business is not the best idea. Consider buying financial instruments instead because the venture capitalists have tons of money and it's hard to compete with that. When you buy shares or bonds you are buying part of a business anyway. If you're looking at starting a business, capitalization is always important. If you're going to have to borrow you'll have to provide a business plan that shows you have done your homework. It's good to actually know the product and demographics also, because a hunch is a lot different than actual figures. Much of the rest is admin/legal, infrastructure and logistics but they are important also. It's a big step but plenty have done it and made good. Depending on the scope and size of your idea it might be money well spent to hire consultant(s). Regardless, make sure you separate your personal finances from the business by forming a LLC or similar. If it fails you will at least not be totally wiped out. Good luck.
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