Top Tips To Reduce The Emotional Costs of Investing

Top Tips To Reduce The Emotional Costs of Investing

 

If you think through your past investment activities, you may notice that some of your more significant mistakes have been related to emotions. For example, the market took a downturn, and you sold stocks when it was better to ride through the storm. This type of loss can be considered to be an emotional cost of investing. It may be one of the more significant investing costs that you could face, and these tips can help you to reduce the impact of emotions on your decision-making processes.

Create a Plan:

Many people make investments with the decision to simply see how much money that they can make from them. However, with all investments that you make, you need to have an up-front plan regarding when to sell. Determine what profit you expect to make from the investment, and stick to your plan. Of course, you should sell when there is a fundamental reason to do so. For example, cut your losses if the company is about to go bankrupt. Otherwise, be prepared to weather the storm.Focus on Your Goals:

You may be a short-term investor looking for a quick gain, or you may have a long-term hold position in mind. Remember that long-term investing means that your investments will have high and low periods. Before you sell during a downturn, ask yourself if this decision will help you to reach your goals. When you always make decisions with your goals in mind, you will let your goals guide your decisions rather than your emotions.

Have an Emergency Savings Account:

Some investors make emotional decisions that result in financial loss because they are afraid of losing a considerable amount of money that they may need access to within the next few months. In a sense, they do not have the financial means to withstand a serious downturn. One way that you can combat this type of emotional decision-making is to establish and fund an emergency savings account. You certainly do not want more money than necessary sitting in an account with a low rate of return. However, this is preferred over the possibility of taking huge losses related to emotional decisions. Therefore, plan to have at least nine to 12-months of your expenses saved in an emergency savings account.

Understand the Investing Experience:

Some very low-risk investments will increase in value at a slow rate without ever decreasing in value. However, when you want to see major gains, you can reasonably expect to deal with more risk and greater fluctuations. This is a part of the investment experience that many investors understand initially. However, they are ill-prepared to actually deal with the effects of losses. When you focus on this understanding and when you understand that markets eventually rebound if you wait long enough, you can avoid unnecessary losses.

Financial losses from investing can be staggering at times, and they often are unnecessary. Many losses are the result of emotional decision-making. Apply these tips to your activities to avoid this type of loss.

Mark Angelo co-founded the Investment Manager in August 2009 and two affiliated investment managers.

Essential Steps for Successfully Selling a Business

Essential Steps for Successfully Selling a Business

Building a business is one of the most challenging projects that you could ever take on. Going from idea to profitable business is very unlikely and those that successfully create a viable business have really accomplished something. Once you have a business, you may decide to cash out and sell it to someone else. If you’re thinking about selling, here are a few important steps to take first.

Get Financial Records Ready

Any potential buyer is going to want to see financial records of your business. If you are behind on keeping up with the books, now would be a good time to get caught up. There are also steps that you can take when running the business to make it look more attractive to a potential buyer. For example, many business owners incur business expenses to help themselves avoid paying income taxes on profits. However, when you look at the finances of the business later, it makes it seem like the business is not profitable. If you want to sell your business in the future, stop trying to avoid taxes and make the business look as profitable as possible.

Get a Business Appraisal Done

Before you list your business for sale on the market, you need to get a realistic opinion of what it’s worth. In many cases, entrepreneurs are partial to their own businesses and they overvalue them. In reality, the price that the business could sell for on the open market is much less. If you work with a competent business appraiser, they will be able to tell you a realistic number that your business is worth. They’ll look at factors like sales, profit, assets, and what similar businesses have sold for recently. If you list your business for too much, it could stall the sale from happening. If a business sits on the market for too long, potential buyers might start to wonder if something is wrong with the business.

Get Documents in Order

In the beginning stages of starting a new business, it can be a whirlwind of activity. You do whatever is necessary to get the business going and sometimes details get lost along the way. If you are thinking seriously about selling the business, take the time to get all of the important documents in order now. Things like the articles of organization, the operating agreement, business license, sales tax ID, federal tax ID and other documents are critical to locate. Sometimes, not being able to find all of the pertinent information can turn off a potential buyer. They wonder what other important details you might have missed along the way. Get all of the important business documents together and keep them in a safe place. Anything you can think of that you would like access to as a business owner is important to include.

Successfully selling your business can be invigorating, but it often takes a lot to get to the finish line. Be patient and be willing to work with your potential buyer to make it work for both parties.

Mark Angelo is the Co-Founder of Yorkville Advisors.

Red Robin Will Offset Minimum Wage Increases by Firing Busboys

mark angelo red robin fires bus boys

Already threatened by the recent drop in casual dining revenue, restaurants like Red Robin are expected to face another severe challenge this year by way of minimum wage hikes.

Red Robin is headquartered in Colorado and most of its restaurants are stationed in the Midwest and towards the Pacific – all states that have lobbied successfully for an increase in the minimum wage up to $8.50 to 11.50 an hour. While the federal minimum wage remains closer to $7.50, states have taken it upon themselves to add the hike in their respective areas.

Who Does This Affect the Most?

Busboys. Red Robin has already experimented with eliminating the position of expediter – the people who plate the food in the kitchen for the servers who then deliver it to the customer – and have annual savings upwards of $10 million. They will look to do the same thing with busboys, another group of people who stand to benefit from the minimum wage increase but who have traditionally been at the low end of the pay scale.

Who Else Will This Affect?

Servers. And managers. And anyone else associated with a local Red Robin establishment.

Busboys provide a critical service in the casual dining environment. When a customer gets up from the table, it’s the busboy’s job to get there as quickly as possible, remove the plates, wipe down the table and chairs, and get the table setting ready for the next customer. This process is called “turning a table over”, and if all goes according to plan, that entire process should take less than a couple of minutes. As any server will tell you, that can be the difference between an extra 10-20% in tips over the course of an entire night. Not only that, but busboys often participate in the washing duties before, during, and after mealtime.

If that occupation is all of a sudden eliminated, who is going to pick up the slack? The waiters will have to clean the tables themselves, get the place settings taken care of, and then help with any other auxiliary duties as they arise, in addition to their normal serving duties. If a store is especially crowded one night or the restaurant is understaffed, that could make for a long and frustrating day.

What Impact Will This Have on the Restaurant?

According to Restaurant consultant John Gordon, a big one. With the waitstaff now focused on multiple objectives and less on the customers, that means more opportunities for customer service issues to arise and create big problems. Busboys may be more “behind the scenes than others,” but they still provide a valuable service to the restaurant.

Is There Any Other Choice?

According to Chief Financial Officer Guy Constant, no. Slashing busboys in the face of oncoming wage hikes are expected to save $8 million this year at over 500 restaurants. Moreover, Red Robin has been experimenting with ways to speed up delivery service from kitchen to customer without losing anything in terms of food quality or customer service. If it can do that, then eliminating the busboys may be a win in the long run regardless.

YORKVILLE ADVISORS. global alternative investment manager providing specialty financing solutions.

5 Questions You Should Always Ask During a Wall Street Interview

mark angelo 5 Questions You Should Always Ask During a Wall Street Interview

If you’re being considered for a job on Wall Street, congratulations are in order. You’re being granted access to one of the most financially lucrative career paths. Even if you can’t guarantee that you’ll be hired, it should still be viewed as an honor to even be considered. While you obviously should be prepared to answer questions, you also need to have questions of your own. Here are five questions you should always ask during a Wall Street interview.

1. How has this company performed in the last year?

A business’ past is important, but recent history is most vital. You need to have evidence of this company doing well as of late, including right now. You should look at profit records and projections if you have access to them. Give the interviewer a chance to speak as well, of course. They should have concrete examples of how they’ve performed. If they seem like they’re trying to qualify their responses too much, you should be troubled.

2. Why did the last person leave this position?

While a vacancy in a job is necessary in order for you to find work, this is still a good question to ask. Should there have been significant turnover in this company or in this position, you should be concerned. That’s a telltale sign that there’s something amiss about this company. Listen closely to their phrasing and reasoning. It’s possible that the last person left quickly because they were a bad fit, but their predecessor was with the company for several decades. Just make sure there’s not a trend of constant turnover.

3. How are you staying ahead of the competition?

Finance is a competitive field. If a company isn’t making active strides to stay ahead or to better themselves, it can quickly become a footnote. Notice whatever answers the interviewer provides as fully as possible. They shouldn’t be vague terms. They should have a demonstrable action plan that is paying off in some way. Otherwise, you might be boarding a sinking ship.

4. What attracted you to this company?

This is a great way to pick the brain of your interviewer a bit. They might have been at their company for so long, they barely remember their own job interviewer. Let them think for a moment before giving their answer. If they seem like they’re struggling for an answer, you should be concerned. Hopefully, they’ll speak highly of the company and their experience. You should pay attention to their body language as well.

5. What kind of qualities are you looking for?

Finance requires very specialized talents. You can’t just have a nice smile or good attitude. You need to have the knowledge and awareness to work under pressure. There should also be specific knowledge about current financial trends and methods of tracking. This is a great time to further demonstrate your expertise.

Depending on who you’re interviewing with for a job on Wall Street, you can expect different responses. Some might be immediately receptive to your questions and have answers (either genuine or canned). Others might seem thrown off or wary of what you’ve asked. Remember that you have every right to gather as much information as possible. By asking the right questions during a Wall Street interview, you can be sure that you are making the right considerations for your career.

Mark Angelo – Partner at Yorkville Advisors

Saxo Bank Analyst Predicts Bitcoin will Hit $100k This Year

Lately, the value of Bitcoin and other types of cryptocurrency have been dipping. However, one analyst has made a huge prediction, that Bitcoin will hit the $100,000 mark sometime this year.

Why the Bitcoin Value Increase Prediction?

Of course, in order for such a prediction to actually occur, individual units of Bitcoin, which currently have a value of $12,000, would have to increase over eight times that amount. While this seems like a far stretch, the analyst, Kay Van-Petersen of Denmark’s Saxo Bank, believes it can happen. A previous prediction by analysts from the firm in its Outrageous Predictions list was that Bitcoin would triple in value in 2017. That one came true in the spring of that year as Bitcoin went from a value of $900 to $18,000.

Since late 2017, Bitcoin has struggled. At times, it has dipped way down. Currently, its value is around one-third less than its highest of all time.

Regardless of the current struggle, Van-Petersen states that it wouldn’t surprise her if Bitcoin increased to somewhere between $50,000 and the high of $100,000 during 2018. She pointed out the pattern of Bitcoin surging in value, plummeting, plateauing for some time and then vastly increasing again.

Van-Petersen explained that at the moment, Bitcoin has been building a kind of foundation that will soon rearrange itself so that its rates will soar even higher.

Fluctuating Bitcoin Value

Only a month ago, Saxo Bank’s Outrageous Predictions list for 2018 stated that Bitcoin’s high peak would reach just above $60,000. However, the firm’s analysts have also claimed to believe that the Bitcoin surge would also eventually diminish sometime before the end of the year. Specifically, the bank believes that there will be a considerably remarkable peak for Bitcoin in 2018 but that it will ultimately take quite a crash and pretty much hobble into 2019. In addition, the bank further predicts that individual Bitcoin units will only be worth around $1,000 each within one year’s time.

Skewed Bitcoin Logic

Of course, it’s important to keep in mind that, although the predictions Saxo Bank’s analysts made for Bitcoin in 2017 were impressive, to say the least, at the same time, their explanations for those predictions are somewhat skewed. The analysts claimed that the increase in Bitcoin’s value would happen due to inflation and that United States dollars would also increase in value, therefore leading to investors wanting to flee mainstream banking systems. This never occurred as the dollar has stayed stable and inflation is mild.

Investors have instead begun to rely on Bitcoin and other types of cryptocurrency because their values tend to skyrocket. Essentially, it seems to be a get-rich-quick concept, something that investors find very attractive. If the trend continues into this year, cryptocurrency can peak even higher.

Mark Angelo is the Co-Founder of Yorkville Advisors.

What is miFID and What You Need to Know About it

MiFID is a term being thrown around in financial circles more in recent weeks and, while you may know that it’s an acronym for Markets In Financial Instruments Directive, you may not know exactly what that means. Essentially it’s a regulation that helps promote greater transparency throughout the financial markets in the European Union. It also makes regulatory disclosures standard for certain markets, so the entire system will be more unified. Although first established in 2008, more recent amendments to MiFID rules lend greater oversight to pre and post-trade transactions. Continue reading “What is miFID and What You Need to Know About it”

Ready to Expand Your Portfolio? Here are 5 Types of Investments You Should Know About

If you are looking to build a rock-solid portfolio that will allow you a greater degree of financial freedom, you have no doubt considered investing. Investing is one of the best long-term ways to create wealth and diversify your sources of income. With that in mind, here are five types of investments that you should know about for a stronger financial portfolio. Continue reading “Ready to Expand Your Portfolio? Here are 5 Types of Investments You Should Know About”

Here’s How Exchange-Traded Funds are Shaking up Investing

The explosive growth of exchange-traded funds is not a new phenomenon on Wall Street. Over the past 10 plus years, ETFs have seen assets rise to nearly $5 trillion while raking in nearly $300 billion in inflows in 2016. Some analysts believe they could represent almost 60 percent of all U.S. investments over the next 10 years. Although largely unnoticed by average retail investors, ETFs are shaking up Wall Street and the investment world. Continue reading “Here’s How Exchange-Traded Funds are Shaking up Investing”