What Kind of Business Will You Buy?

     Investing 101

Are you saying you have no interest in being part owner of any business?

Let’s take a look at that comment. Have you eliminated investing in stocks, mutual funds, ETF’s, variable annuities, or private partnerships?

If you own a share of stock you are a partial owner of the company that issued it. The mutual funds and the other mentioned investment vehicles likely own shares of public companies.  You are likely partial owner of many companies.

Do you participate in a retirement program? Is it an Individual Retirement Account?  Is it through your employer, such as a 401(k), 403(b) or 457 plan?  Is your employer setting aside money guaranteeing you a pension when you retire?  Where is most of the money invested?

Your money is used to buy partial ownership in businesses. Some are incorporated in the USA. Others may have headquarters in foreign countries.  Some companies may be well established with long histories of providing goods and services. Some may be new, as recently opened as within the past few days. Some may be sharing annual profits with shareholders, others keeping the money in order to more rapidly expand business. Some have strong cash reserves while others may not have “two dimes to rub together”.

So, let me rephrase the question. Do you know what kind of businesses you partially own? Do you understand the amount of risk being taken in your businesses?

The determination of what businesses to own, how secure they need to be financially, and how diversified among industry areas and countries is an individual decision.

A trusted financial advisor can help you decide on the kinds of companies to consider and how to select the right combination of businesses.   

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