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Top Ten Lessons Entrepreneurs Can Apply To Investing   Before becoming a Financial Advisor for entrepreneurs in Toronto, I owned, operated and eventually sold two language schools.  Like all small business owners, I had to make the best use of my financial resources. When I reflect upon the top ten questions that people ask me about their financial affairs, I find they are not so different from the questions entrepreneurs deal with in their business. In my Entrepreneurs Investing Strategies Series, I will explore each of the Top Ten.

Risk and Reward Are Joined at the Hip:Entrepreneur Investment Strategy #10 When you invest your time, money and efforts into your business, you know there is risk because you cannot control everything that happens around you. Yet, because you believe in yourself and your business idea, and you have knowledge of the market and trends, you take the risk. You expect a good return on your investment. You probably feel safer steering your own ship than being an employee on board a large liner. Yet, many of your friends and family who have corporate jobs can't understand how you can stomach the risk. Unfortunately some of them find out their "safe" jobs are cut in a restructuring, so who took the most risk, you or them? Your reward for risking your capital in your business comes when you collect dividends on top of your salary, and when you sell the business and live off the proceeds. That doesn't happen when you are an employee. Likewise in investing, risk and reward are joined at the hip. There is no investment without risk, and often, the more return you want, the more risk you have to take. Having said that, diversification of your investments is fundamental to improving your gains and minimizing your losses. Investing smaller amounts over time (dollar cost averaging) may also improve your returns because you spread the risk out rather than purchasing the shares or fund all at once. On a long-term basis, stocks and equity mutual funds do outperform bonds and fixed-income funds, and cash always earns the lowest return. What is the good in being safe by having cash under the mattress if inflation eats away at the value of that cash every year? You focus on being smart in business and avoiding mistakes. Do the same with your investments and find fund managers who aim for above average growth while preserving capital. Diversify the types of funds you have so that you aren't betting the farm on a single strategy. Contact me at mheenan@assante.com for more advice on how to do that. You can read the rest of the articles in this series on my blog Just Good Advice.

Marylou Heenan, Financial Advisor

Assante Capital Managment Ltd.

Assante Capital Management is a member of the Canadian Investor Protection Fund and is registered with the Investment Industry Regulatory Organization of Canada.

This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. Insurance products and services are provided through Assante Estate and Insurance Services Inc. 

Using borrowed money to finance the purchase of securities involves greater risk than using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines. Note: Leveraging carries its own risks and is not for everyone. Talk to your financial advisor for advice on properly managing those risks.