Month: August 2016

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Diversifying your investment portfolio

investment portfolio diversify

Investment portfolio diversification is a tried and tested technique. It includes reducing risk by spreading investments across a changing range of assets, firms, sectors and geographic places. Clearly, diversifying your investments isn’t a complete buffer against financial losses. Nevertheless, it remains an important strategy for minimising the danger that regularly helps investors to reach their financial targets.

Why does a diverse investment portfolio improve your likelihood of growth and achievement? An investment portfolio including investments with little or no relation to each other is known as a low correlation coefficient (LCC). LCC reduces likelihood of  impact of negative worth fluctuations in any one business, sector, country or asset. Diversifying your investment portfolio enables falls in the value of one investment to be cushioned by rises in the value of another.

Here are the crucial ways by which you can diversify your investment portfolio:

 

  1. Diversify Your Business Investments:

It’s clearly common sense not to invest all your money into just one company. Little is certain in the present economic climate as well as the most flourishing of businesses can endure a fall in value or even fold. Always spread your investments across several businesses and contemplate investing in firms that run in different market sectors. It’s critical to conduct comprehensive research into any company you are considering as an investment. It’s always best to seek the guidance of an independent financial advisor before making a decision that is final.

 

  1. Diversify Your Sector Investments:

Purchasing in a range of distinct sectors brings the same advantages as investing in companies that are different. In the present economic climate, there have been peaks and troughs in an extensive range of sectors. To provide your investment portfolio to a pillow against your entire portfolio losing worth, spread your investments with little correlation across industries. For example, if your investment in an organisation within the education sector suddenly experiences a dip in value, a rise in your investment that is gold could compensate for this.

 

  1. Diversify the Geographic Places of Your Investments:

An excellent way to minimise the effect of stock market moves is to spread your investments across separate regions and different countries. It’s quite a danger to place all of your faith in the fiscal policies of its ruling authorities and the economic stability of a country that is single. Again, it ’s critical to conduct research into the stock markets of different countries and get expert advice from an independent financial advisor before making any investment choice. Before choosing to invest abroad, as some developed markets are more volatile than others calculate the risk entailed, and can be affected by systemic threats.

 

  1. Diversify Your Assets:

It’s shrewd to have a good mixture of varying asset types within your investment portfolio, as it distributes danger. You will find many different types of assets, the primary kinds being bonds and shares, which often have a low correlation. Discuss with your independent financial advisor the best way to blend the asset types. They’ll have the market knowledge required to spread the danger throughout your portfolio. You should decide the degree of risk you are willing to take according to your financial aims. Are you close to the time you desire to draw upon your invested cash? Then maybe it’s time to reduce the risk in this area. You may feel inclined to take greater risks, in case you are planning a long-term investment strategy. Make sure to work with your financial advisor to create a portfolio tailored to your personal financial goals.

 

  1. Prevent Over Diversification in your investment portfolio:

Finally, diversification can protect your investment portfolio from worth changes in related investments. However, there is a delicate balance to over-diversification and being diverse enough to realise gains. You want to have enough investment in a business or sector to profit from any increase in value. It’s an instance of reaching the appropriate balance and preparation your investment portfolio carefully with your financial advisor.

Author: Diverse Investor



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Identifying Unique Business Opportunities: 4 Key Questions to Consider

Recognising unique startup business opportunity

Launching a successful business requires more than just a brilliant idea; it demands the ability to recognize and seize genuine and unique opportunities. While the pursuit of entrepreneurial dreams is admirable, it’s crucial to approach potential ventures with a critical eye, ensuring that your concept possesses the potential for long-term success. To assist you in this process, here are four key questions to consider when evaluating business opportunities:

1. Does This Already Exist?

Before diving headfirst into a new venture, it’s essential to examine whether similar businesses already exist in Australia. If so, carefully analyze how your approach differs from the competition. Can you identify areas for improvement or untapped potential within the existing market? Consider introducing innovative solutions or catering to underserved customer segments to set your business apart.

Even if your initial idea doesn’t directly correspond to an existing business, exploring the success and shortcomings of established Australian companies can provide valuable insights. By understanding what works and what doesn’t, you can position your venture strategically, avoiding pitfalls and capitalizing on emerging trends.

2. Why Do People Need This?

The foundation of a successful business lies in understanding and addressing a genuine need. Before committing to any venture, thoroughly evaluate whether your product or service offers tangible value to your target audience in Australia. Can it solve a problem, improve efficiency, or enhance their lives in some way? If the answer is no, it’s crucial to reconsider your concept.

A business idea that fails to satisfy a genuine need is unlikely to gain traction or generate sustainable growth in the Australian market. Remember, true entrepreneurial success stems from addressing real-world challenges and providing solutions that make a positive impact on customers’ lives.

3. What Is The Target Consumer or Customer?

Identifying your target audience is paramount to crafting a successful business strategy in Australia. By understanding the demographics, preferences, and needs of your ideal Australian customer, you can tailor your offerings and marketing efforts accordingly. Creating a customer avatar, a detailed representation of your target persona, can help you visualize and empathize with their needs.

Consider factors such as age, gender, socioeconomic status, and lifestyle habits when defining your target market in Australia. This will enable you to develop products and services that resonate with their specific interests and pain points. A unique business approach is built upon a deep understanding of its Australian customers, ensuring that every decision aligns with their needs and aspirations.

4. Are The Resources There?

Launching a business in Australia requires a realistic assessment of the financial and operational resources at your disposal. While a successful venture can eventually generate revenue, the initial costs associated with starting a business can be substantial. Carefully evaluate the upfront investments necessary to establish your company, including equipment, supplies, marketing expenses, and potential staffing needs.

Equally important is considering the scalability of your business model in Australia. As your venture grows, will you have the infrastructure and resources to accommodate increased demand without compromising quality or customer satisfaction? Anticipating and planning for these growth challenges will ensure your business remains viable and sustainable in the long run.

By carefully considering these four key questions, you can effectively evaluate the potential of business opportunities in Australia and make informed decisions that pave the way for long-term success. Remember, genuine entrepreneurial triumphs arise from identifying unmet needs, understanding your target Australian audience, and strategically managing your resources.

Reference:

Australian Government – Business: https://business.gov.au/: https://business.gov.au/


Author: Startup business owner

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Recognising the potential in a prospective employee

Recognising the potential in a prospective employee

Recognising the potential in a prospective employee could be the key to your business succeeding. It has been proven that investing time and money into building a successful team is extremely profitable in the long-term.

Many companies continuously say that their employees are responsible for the biggest part of their success. But how to recognise the potential in someone?

Steve Jobs, Elon Musk, and many other great CEOs have confirmed that an enormous part of their companies (Apple, Space X, PayPal, Tesla, etc.) success, is owed to their employees. Moreover, many authors have dedicated themselves to researching the topic of team-building. They analyse and refer examples of the most successful companies in the world and concluded that if you want to grow your business and be more successful and sustainable, you have to build your workforce. Also, they all conclude that it is necessary to recruit the right people, with potential.

It may not be about formal advantages

The logical question is how to identify the right people that fit your business? The right person you are searching for may not always be those who have formal advantages, but those who have opinions and values that correspond to the principles of your company. Some successful businesses in the world foremostly practice to recruit talented people. Secondly, they then look to find an appropriate role in the team.

Three core traits

Three core traits have been identified that key performers possess: aspiration, ability, and engagement. If the person aspires, they will have the desire to take on responsible tasks, all kinds of challenges and make important decisions. Ability means that the individual has a combination of natural traits and skills. And finally, engagement is the person’s full emotional and rational commitment and devotion, the discretionary effort and intent to get or complete the job. One does not go without the other, so when you’re interviewing the potential employees, you should pay attention whether they want to do more and achieve more, whether they see a future for themselves in your company, whether they’re always ready to go the extra mile!

Passion is crucial

People with passion can change the world. It’s so much easier to stay focussed on what you are doing, if you have a passion for doing the job. But how do you recognise passion from the get-go in an employee interview? First, try to make a distinction between fake from real passion. Have you ever been harassed by an over passionate salesperson. You feel that something is not quite right, false even? Remember you are trying to identify the right people who can use all of their passion for your company’s goals. Additionally, see how they speak about their work, your business and about their plans.

Communication is essential

Now the thing that links all of the key things above is your potential new-hires ability to communicate. Let’s face it, the success of your company depends on it. That is why it is crucial you recognise the communication skills when undertaking the interviews. An employee with good potential listens to others and responds effectively. If you want your company to reach higher goals, you need goal-oriented people that can communicate clearly. See our article for the importance of communication and how it relates to customer satisfaction.

Dynamic or inflexible

Today’s work circumstances, roles and responsibility are dynamically changing. Your role could be this today and something else tomorrow. This is why you have to recognise the person’s ability to adapt to new situations. Also, growing along with your business is equally important. Consequently, if you identify inflexible individuals, who interfere, challenge everything, duck and weave tasks that are slightly out of their normal duties, watch out!

If you recognise the good traits above in any of your employees or potential employees, you will certainly be on your way to building a strong team and a strong company. Remember that employment sometimes has to deviate from the formal principles and you should trust your instincts. If you recognise a potentially good employee’s worth to your company, hire or promote them. But value passion the most, because it comes naturally and you can’t be taught this.

Author: Industry Professional



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DIY vs Professional home project

DIY handyman home renovation Professional home project

Is it better to  take on a home project in a do it yourself (DIY) fashion vs. engaging a professional to complete the work? I imagine this question gets asked a lot every week in households all over the world, particularly if you are not that handy like me! It certainly has at my house over the past few weeks.   In this article, we will cover off questions to consider before embarking on a DIY project. We will talk about the potential to save thousands of dollars, compared to, is it really worth it?

Potential to save thousands of dollars

In recent storms, my fence fell over due to the high winds and fallen trees resting on it. It obviously needed fixing. My first thought was to get professionals to provide three quotes. I was quite shocked at the high price of the quotes (and the pricing differential!).  However, the quotes did involve replacement of the fence. The tradesmen don’t seem to want to repair the fence and replacement is the suggested course of action. As the fence was still in good condition i.e. straight but leaning, it got me thinking, could I fix the fence myself and potentially save thousands of dollars?

DIY, Is it really worth it?

The web is a fantastic resource, and based on the relatively simple task, my cost estimates showed I actually could save thousands of dollars. So I decided to give it a go. What could go wrong? After two weekends of hard labour, plan revisions (due to human error) and multiple trips to the local hardware store it was done. On reflection, I am jubilant with the result, which was very effective and did save me thousands of dollars. There is also the satisfaction of doing the task yourself and the pride of a job well done!

Personally, I have found the key points to consider are the (1) size of the savings, (2) complexity of the job and (3) time vs. money tradeoff. As a non-professional taking on something for the first time, estimating the complexity or time to complete the job may be very inaccurate. So you should leave some fat in your estimations and then you decide is it really going to be worth it. For example, I did not take on our recent bathroom renovation as I did not think the amount I could save (if any) outweighed the effort and difficulty of the job.

Questions to consider before embarking on a DIY job

  • What are the potential savings?
  • How difficult or complex is the task?
  • Is the time vs. money tradeoff worth it? (i.e. forgoing family or other personal time)
  • Do you have the required tools already?
  • Is the job potentially life threatening? (i.e. electrical work)
  • Have I got some good mates that may be able to lend a hand?
  • Does it have to meet the applicable standard for that code, if so will it when I finish the project?

If you can get through those questions and are still keen to proceed with the DIY, I wish you the best of luck and may see you at the hardware store on the weekend!

Author:  Professional Banker