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Investing. Whether you are investing in stocks or in environmental, social, and corporate governance(ESG investing) some factors need to be considered.
Best factors to consider before investing. Best investment decisions to take before investing. Wise investment decisions to make.
Investment involves expenditure on an investment asset that is intended to provide a return by way of interest, profit, income, dividends, capital appreciation, or value for money.
Investment can only be undertaken if there is some money or if there are resources that we want to channel through other means to earn us some income, then we should invest in
investment products that would give us high returns on our money now and or in the future.
In all investment decisions, there are many factors to consider before one makes the final decision to invest in particular investment products include:
Whenever is no control or little control of your investment the risk of losing your investment is considered very high.
Control gives the investor the technical, financial, and human resource power to put measures in the business to influence and direct the behavior of the business including the employees and the course of the business to prevent any forms of risks that could prevent the investor from making maximum gains or profits from the business.
Control deals with the processes and procedures that regulate, guide, or protect a setup.
Organizations have control mechanisms such as financial policies, human resource policies, and technical or operational policies in place and they are made known to all employees.
Cash management is one of the main control mechanisms of all organizations irrespective of the size of the organization.
Controls are reviewed and revised to make them more relevant and more powerful to prevent, detect, and correct errors, mistakes, or fraudulent activities in the day-to-day activities of businesses.
Stake and or share
How much is your stake or share in any business venture is very important to know. Your share in any business venture determines your returns.
You always need to know the value of your stake or share in a business that you have invested into.
If you know your stake or share you can plan properly for its rewards and risks.
There should always be a purpose for investing so that if the purpose is not being met then you can change your mind to go into other ventures.
It is motivating to have a purpose for any business you venture into so that the purpose could drive you to achieve its objectives in order to enjoy the benefits that come with it.
Investment should be made with an objective to make some profit or to get some value for money.
Unless it is for charitable purposes, investments should be made with the aim to make some gains or profit.
How soon can you turn your investment into cash when the need arises?
How soon can you get your money back when you need it?
These questions must have answers that indicate that the investments could easily be turned into cash when needed.
If you are able to turn your investments into cash easily whenever you need then you would not necessarily be in cash-flow or liquidity problems when the need arises. However, the longer it takes to turn the investment into cash or liquid, the harder you would be in liquidity problems.
The amount of taxes to be paid on the returns on any investment should be taken into consideration before undertaking the investment.
Lower taxes increase wealth and lessen the tax burden on you and higher taxes reduce your wealth and increase your tax burdens.
Investment should be chosen to help minimize the tax liability of the investor.
Investors can opt for investments that have low tax on cash flow and or capital appreciation, or low tax on interest and or dividend earned.
Risk and security
The stability of any investment venture is very important to inform one to invest or not.
The upward/downward movements of the economy, industry, inflationary trends, and other world economic factors could make a particular investment safe or risky.
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