May 11, 2016

What Makes a Good Investment?

Accountants based in the heart of Glasgow’s Westend, The Kelvin Partnership, have this beginner’s guide to investment

When making an investment, there are a number of factors you need to consider and here at the Kelvin Partnership we want to help you make the best investment with our helpful investment tips.

How Much Do You Want to Invest?

You really need to consider how much it is you actually want to invest and how it is that you want to do this. Do you want to invest a lump sum? Pay monthly? And do you want to make a long-term or short term investment? You should also look to see if there is a minimum financial commitment to ensure that the investment is something that you can afford.

Long-term Viability

When looking at a company you should see yourself owning stock in the company for at least the next ten years. Most money made from investments comes from the stock you own in the company for a relatively long period of time, by leaving it alone, the value rises.

Good Business Statistics

Many people want to invest in a company simply because of its image and ideas, and you may be the same, but ultimately, if they don’t have good profits, price or management, chances are you’re throwing your money down the drain.

Easy to Understand Business Model

If a business is run simply then, generally, the business is stable and will have a good growth curve. This is because a simple business model doesn’t take much time to learn in order for it to be implemented, making the overall process much easier. (And ultimately there will be higher profits and better returns for you!)

Corporate Growth Vs Per-Share Growth

This means that if a company was to have the same profit, sales and revenue for five years running, it can still create larger returns for its shareholders by reducing the number of outstanding shares. You should look for a business that has a policy for reducing the number of outstanding shares, making your stake in the business larger over time.

How can The Kelvin Partnership Help?

The Kelvin Partnership can offer advice on paying tax on your investments as well as other accounting activities. Contact us today to see how we can help.