Treat your online investing as a Business…

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When you place money in a high street bank savings account you will rarely need to closely monitor its performance as the interest rate is normally fixed and assuming you have selected a reputable bank your funds should be perfectly safe (at least we hope so because we’ve all learnt the recent lessons haven’t we?).

For your online investments this hands off approach is not recommended. In fact you should treat any online investment as part of an investment portfolio that needs to be actively managed. The best way to do this is to consider your portfolio as a business venture and manage it in that way.

Before you make any investments sit down and consider your overall business goals.

1. What funds will you have to invest with
2. What return are you looking for (daily, weekly, monthly and annually)
3. How will your portfolio be constructed (what range of investment risk will you consider)
4. Consider tax implications and how they will be managed
5. How will you monitor performance

All of the above points should be addressed so that you are able to manage your funds in a constructive manner.

Even if you are investing a relatively small sum start to make withdrawals on a regular basis (you should tie this in with the goal of recouping your seed money as soon as possible if that forms part of your business plan). This way it will be easier to treat your investments as a business as regular withdrawals will create the mindset that you are aiming to make a profit on your funds. When you make a withdrawal there is nothing to stop you re-investing the funds in a new programme. As this is a conscious decision it complies with your business plan objectives for diversification and ensures that you create a more balanced portfolio.

You could even take some earnings out to improve your current lifestyle, whatever you do make sure that it is planned rather than a random act as this will breed bad habits for the future.

It is very easy to make an investment and then rely on the programme website to monitor how it is performing. Whilst this may be acceptable if you have just one investment it will quickly become difficult when you join more.

Develop a record for each investment you make and make sure that you keep this up to date. The level of detail you record will be a personal decision but it should be enough to allow you to have a view of your overall portfolio performance on an ongoing basis.

There are software programmes available on the internet that can help you track and monitor all the programmes you invest in. Some are free and some require payment. Take a little time to find one that suits your needs and integrate it into your monitoring activities.

Doing this will help you both manage the inflow and outflow of funds and reinforce the need to treat your online investing as a business.