Why business owners should not rely on yesterday’s fund winner - Modern Marks Business Consultants

Why business owners should not rely on yesterday’s fund winner

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MarketWatch’s weekend coverage points to a practical issue for business owners who invest personally or through a company: a stock-index fund that has performed well may not remain a dependable winner. The headline’s warning that conditions can change quickly is a useful reminder that recent performance is not a business plan.

That matters because owners often connect investment results with decisions about hiring, expansion, debt repayment or holding cash. If an investment assumption changes, the timing of those decisions may need to change as well. A strong market result can provide flexibility, but it should not automatically be treated as permanent operating capacity.

The same MarketWatch package also examines a changing bond market and opportunities in housing. Together, those topics suggest that financial choices should be viewed across more than one asset class. Owners reviewing personal or corporate finances may benefit from asking whether their current mix still matches their time horizon, liquidity needs and tolerance for a sudden change in results.

The package includes advice from the Moneyist, adding a personal-finance perspective to the market discussion. For small and mid-sized businesses, the broader lesson is straightforward: keep investment decisions separate from essential operating cash, revisit assumptions periodically and avoid basing a major commitment solely on what has worked most recently.

Source: MarketWatch.

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