Monday, 10 February 2014

Why We Shouldn’t Be Afraid to Risk It


As an investor, I think that it is important to also consider high-risk investments. Yes, we could be successful in diversified portfolios. Yes, we understand the economy’s saving grace for mutual funds and bonds. However, spreading ourselves thinly to gain something from everything is like trying to impress everybody when we know we can’t.


A high-risk investment comes my way and I’ll study it further. I consider investments dangerous when they’re innovative, but not too compelling. Another would be a business structure that is so simple, it seems too easy and too good to be true. Another would be an investment for a friend; I value friendship, but I will never do business for a friend because of the emotional attachment involved.

Yet one of these three hold the key to success. Look at smartphone applications; many of these games have a unique innovation, but to make them “presentable” to the public, it will need several hundred thousand dollars. I might not be compelled by the innovation as an investor because I’ve seen the idea before, but they just changed the characters and improved the levels.

A too-simple business strategy is something that a kid could come up with without having to explain other details, but sometimes, these business strategies actually work in application. A marketing strategy, for as long as it compels consumers to purchase your products, is an effective marketing strategy regardless of the message. A simple, emotional and clever quirk to such a business strategy might just be the right ingredient for a success story.

So don’t be afraid to risk it. Even with family or friend investors, a sound reasoning could entail high-risk, but may possibly reel you in with high success.

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