One of the big differences between being an employee versus being an entrepreneur is the responsibility that the latter situation brings with it. There is more needed than simply putting in the effort. Next to the activities, there is the need for investments and decision-making. This impacts the effectiveness and potential of the company you are building. As an employee, it could be that you need to make similar decisions for your company, but the impact can be lower on your personal life. However, we do need to stress that the concept of the ‘intrapreneur’ could be just as similar as an entrepreneur. In most cases, though, the entrepreneur has more appetite and acumen in making decisions and investing.
You can therefore learn a lot from entrepreneurs when it comes to investing. In this article, we will look into the different components you can incorporate to become a better investor.
Plan for the long-term
Short-term gains can seem tempting but are only noise when you focus on the long-term. Entrepreneurs know this is important, as the sustainable growth of their organization is dependent on these investments. With investment in the short-term, you can only satisfy the needs of current customers and demands, but lack the potential growth that lies in the future. Therefore, you need to make these investments and dare to fail. For example, you could invest in hydrogen cars now, when it is still new, and keep the stock for more than five years. It could be that the stock becomes worthless, as more people switch to electricity and hydrogen loses traction. On the other hand, it could be successful and provide very high profits compared to short-term investments.
It’s all depending on the right balance
In that respect, it depends on how you balance your portfolio. This is the same struggle that an entrepreneur needs to go through in terms of investments. There needs to be a right mix between short, mid, and long-term investments to ensure profitability over long periods. This is learned through a process of trial-and-error that allows you to build experience in investing.
Diversification can be important
When it comes to investing, people used to say that diversification is a cornerstone of any portfolio. With diversification, you spread risk and optimize for profits. This can be true but does not need to be the case. This all has to do with your risk appetite. When you look at entrepreneurs, some choose to diversify to try different products and segments. However, many entrepreneurs focus on one segment with one product and optimize for that. They are not necessarily less successful, on the contrary. They can become a market leader faster, and focus completely on the needs of their target audience. You could argue that it involves more risks, but in the end, the revenues are also higher. Therefore it is dependent on how you want to invest, and the risk you want to bear. Just like an entrepreneur, you need to consider these elements.
Building a professional portfolio
If you are interested in building and analyzing your portfolio, you can consider the use of a stock tracker application. This allows you to have a full overview of your stocks and see the latest market trends, enabling you to make informed decisions. One of the leaders in the field is Delta, which also offers integration with brokers and crypto exchanges. You can check their website to learn more about the features that they offer.