Business and Investments: How to Protect and Make the Most of your Money

Lizzie Weakley

February 11, 2016

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It can be challenging to balance risk and reward across your investment portfolio. If you strive for maximum ROI, you'll also end up exposing capital to high levels of risk. On the other hand, protecting your capital from risk caps its growth over time. Below is a guide to protecting your investments while making the most money possible.

Diversify Your Portfolio

Stocks and bonds are the go-to investment vehicles for most people. It's well-established, highly liquid, and, incredibly versatile. Diversify your investments further by allocating a predetermined portion in other assets, such as currencies, commodities, ETFs, and even online lending platforms, which are currently on the rise. Although, when using the latter, make sure you familiarize yourself with the platform and study loan parameters that minimize risk and maximize returns.

Consult a Professional

Work with specialists who are experienced and passionate in corporate securities and, if needed, real estate transactions. If, for example, you decide to use capital in investing in your own startup or small business, a law firm like Carter West can help you with counseling, procuring key documents, securities, and legal matters.

Look For Value

Value investing is the oldest and simplest way to invest. Yet thanks to its impressive consistent returns over the years, the strategy has been able to survive. In fact, wealthy people like Warren Buffet are a testament to how effective value investing can be. Avoid following the herd, and consider investing only in assets that have real value. Look for undervalued stocks that have positive output, such as revenues and P/E ratio, and are managed by a trustworthy team and led by a highly effective CEO.

Reevaluate Your Portfolio

Investing is a long-term process for capital growth. You can set it and go, and only have to check it after every other month or so. But for investors who want to maximize returns, checking in regularly is essential. Reevaluate your portfolio and look for assets that are underperforming relative to the S&P 500. If it is losing more money than it is making, liquidate the position and reallocate it to a more promising asset.

Maximizing returns on investment while protecting your hard-earned capital can be a roller coaster ride. It takes unyielding effort, laser focus, and solid grasp of the technical details including earnings multiples and macroeconomics. The four tips listed above should lay out the foundation you need to start researching and building a well-protected and profitable portfolio.