The fundamental cause of failure in the implementation of a business project or portfolio occurs due to lack of planning and the belief that the company's problems will be solved in the medium term.
In this changing world, the financial success of companies cannot be assured, which is why saying that there is a unique truth and a methodology to achieve it is a utopia; But if a series of precautions can be taken that minimize the risk or the possibility of making mistakes that affect the criteria and allow improper decision-making.
The fundamental thing in business decision-making when faced with an investment project is due planning, since by doing a good study of the pros and cons, it will be possible to evaluate in a priori way the fulfillment of the objectives that you want to achieve apart of the expenses (which must also be strategically planned) since these are actually the ones that must be allocated in the application of an investment project or projects.
Time factor
Time is one of the variables that directly influences the decision-making process of companies.
This comes to that; If you do not have the necessary resources to make a long-term investment, you must somehow create a savings or financing plan that does not affect initial decisions, since the longer they take to meet the objectives, the greater the risk and therefore the expected success will be directly affected.
A smart decision
As it has been exposed, one of the aspects that should be taken into account the most is the amount of resources that must be and can be invested, but within the planning process it is also important to say in what type of product or financial project is the most convenient to fulfill the needs of the company, all this framed in the time that can be devoted to the previous or historical study of said products or projects.
Profits must be framed by all the respective financial calculations, including all the variables that are deemed important and include inflation and taxes in the calculation.
In the a priori study, it should be analyzed whether it is more profitable for the company, investing in short-term projects that do not provide much profitability, but whether an acceptable security of achieving profit or, conversely, must pursue the long term, and for Therefore, buy securities or invest in projects that you hope to see grow over time.
A smart decision is to create, strengthen and fight for a solid company that will acquire significant value over time to really compete as an organization capable of subsisting without the help of third parties.
The only sure thing is uncertainty
Nobody knows for sure what the future holds, not even the most expert analyst knows what the right investments are. The really important thing is to obtain some benefit, since the value that the company can acquire in a moment by making the right decisions More beneficial than unpredictable security, the financial manager who plans and analyzes the investments you make ensures risk reduction and uncertainty to a minimum.
Short-term investments have a lower return than long-term investments due to the risks associated with their temporary nature.
The benefits are closely linked to the risk rate of the investment and the relationship it has with the market. The company's earnings may be affected by the activity in which the company is involved; therefore it is essential to assess the benefits of the company in recent years, they must have been constant and come from the activities of the company, not from circumstances beyond its general objective.
It is also convenient to take into account the company's liabilities, although in reality these may not determine the investment expectations, since as said before the company in the planning process, it has analyzed what is the degree of indebtedness that it can reach. to obtain the expected returns.
All calculations can help make decisions when choosing an investment portfolio, although it should be borne in mind that nothing allows us to predict what will happen in the market, taking the necessary precautions is the only measure that can be taken in the face of uncertainty.
Information is the key
The analysis of information is one of the most powerful tools that the company can have, but if it is used in the wrong way it can be harmful, the information that best suits the company must be used, so it is relevant to acquire data that evidence the behavior of the market.
Sometimes it is thought that the market is going to behave in a way, but in this changing world nothing is predictable, it is there that the planning that was carried out begins to take hold and it would no longer be about finding the best time to invest but rather about achieve investment quality that partially assures the planned financial returns.
Risk diversification
Investment planning must take into account the importance of diversification to control risk. The concept is based on the fact that if all the resources are taken and invested in a single investment model that will not depend entirely on the evolution of a market or the operation of a company.
Variable income investments offer higher returns than fixed income investments, an adequate diversification of this type of investment can offer great liquidity.
It is vital to remember that it is better to distribute your capital among several securities and not expose your future benefits to the eventualities of a single business entity.
History shows that each type of financial asset has its moments of crisis and boom, combining them in an efficient way allows them to compensate one another at a time, in addition, assets with lower profitability reduce the implicit loss margin in the most unstable.
