Where I’ll be investing in 2018



I find that the end of the year is always a good time to examine my investment portfolio and determine whether any changes need to be made. If some investments have performed well and distorted my asset allocation, it may be time to take some profits off the table and rebalance the portfolio. Similarly, if there are attractively valued sectors, stocks or countries that I am neglecting, I can look at adding exposure.

With that in mind, here’s a brief look at where I’ll be investing in 2018.

Dividend stocks

Dividend stocks currently make up around 75% of my portfolio. That’s something I won’t be changing in 2018. Dividend investing, while not the world’s most exciting investment strategy is one that works for me.

One of my main investment goals is to build up a large dividend portfolio that pays me a sizeable income stream. I still have a long way to go; however, I’m hoping one day that dividend stream will be enough to live off.

In 2018, I’ll definitely be looking to add to this section of my portfolio. The good news is that there’s plenty of value to be found in this area of the market right now. For example, stocks such as Lloyds Banking Group and Legal & General Group currently offer prospective yields of 6.2% and 5.7%, yet trade on P/E ratios of 8.4 and 10.6.

At the same time, stocks that are considered to have highly dependable earnings such as Unilever, Diageo and Reckitt Benckiser currently trade at premium valuations. I’ll be keeping a close eye on these kinds of stocks in 2018, in the hope that a little market volatility throws up attractive entry points.

Growth stocks

Growth stocks make up the other 25% of my portfolio. This part of my portfolio has performed well in 2017 and several small-cap stocks I own have soared. Given their high valuations, I may take some profits off the table.

I’ll continue to look for under-the-radar growth opportunities next year. However, I do think a little bit of caution is warranted towards growth stocks.

Neil Woodford recently stated that the difference between the performance of US value stocks and growth stocks today is “greater than at any stage in stock market history”.

Geographic mix

The bulk of my portfolio is currently invested in UK stocks, although I do have funds that have exposure to North America and Europe.

US equities have had a strong run this year, and the valuation of the S&P 500 now looks expensive in my view. The FAANG stocks have all rallied hard, with Amazon now trading on a P/E of 300. For this reason, I’ll be reducing my exposure to the US.

From a long-term investment point of view, I really like the emerging markets. Countries such as China and India have compelling long-term growth potential. I feel that I need more exposure in my portfolio. However, the MSCI Emerging Markets index has risen over 30% in 2017. Therefore, it might be sensible to wait for a pull back before I invest.

tag : Southbourne Group Singapore, Tokyo Japan

Seven Smart Tips For Starting A Small Business In 2018

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Everyone knows you cannot hang a shingle and announce that you have started a business. Launching a company involves research, planning, financing, and fulfilling legal requirements. Starting a business involves planning, making key financial decisions, and completing a series of legal activities.

The way to put the best foot forward is by writing a business plan to that outlines the way that a company will reach its potential. Then, it comes time to set all the plans into motion.

As the end of 2017 approaches, aspiring entrepreneurs will reassess their situations and consider taking the plunge into business ownership in 2018. It doesn't happen overnight. Rather, it is a process.

1. Conduct market research

Before making any investments, conduct market research to determine if there really is an opportunity to turn the idea into a successful business. Gather information from potential customers and existing business owners in the surrounding area and then utilize the intelligence to develop a competitive advantage in the marketplace.

2. Write a business plan

You can’t get somewhere without knowing what route you will take. That’s where a business plan comes into play. The business plan will outline what the business is, where it is located, who is running it, when it operates and how it will achieve a profit. A well written business plan is a vital step in the process of securing a small business loan.

The most important element of the business plan will be the one-page Executive Summary at the beginning of the document. The summary should detail the name of the business, what product or service it will provide, the competitive landscape in the local market, the differentiator that will set the business apart from its competitors, the management team and each member’s experience in the industry, marketing plan, and financial projections.

3. Secure funding

Once you figure out what is needed to run the business, draw up a budget so that you can figure out how much money you’ll need to start it. Some people will tap into their life savings to launch a new business. Others will call upon family and friends. Obviously, if you don’t have enough money or willing backers to self-finance the venture, a traditional bank loan or SBA loan may be the way to get the business off the ground. Currently, big banks are approving 25 percent of the small business loan applications that are submitted, while smaller banks are granting slightly less than half of the requests they receive.

Before applying for a loan, check your credit rating. If it’s in the 700 to 800 range, lenders will be more likely to fund your venture than if you have a score of 650 or less. Be prepared to provide tax returns from the previous two or three years. Having a business plan is also an important document. All of this information will help build the case to a potential funder that your venture is a sound one and that you are likely to be able to pay the money back in a timely manner.

4. Pick a location

Real estate agents always stress location, location, location. Picking the right location for a business is one of the most important decisions an entrepreneur will make. The choice will have a direct impact on your revenues, taxes, legal requirements and cost structures.  A busy street is a great location for a restaurant – unless there is no place to park. Having great food and good pricing may not help if customers cannot find a place to park without getting a ticket. If you choose to open a nail salon in a town, be sure that there aren’t already 10 others in a one-mile radius. The local market may be saturated. Keep these things in mind when selecting a location. Price should not always be the deciding factor.

5. Choose a business structure

Creating a formal, legal structure for your business provides legitimacy and has an impact on the amount you pay in taxes and the protection of your personal assets. Your attorney can help with the process. There also are a number of firms, such as Incorporate.com, which can assist in the formation of an LLC, C-Corp, S-Corp, or other type of business structure.

6. Get federal and state tax IDs

Every company should establish a federal employer identification number (EIN). Without it, a business will be unable to open bank accounts or credit card accounts. It’s also necessary for paying taxes, which of course, is part of business ownership.

7. Apply for required licenses and permits

Be sure that your company has all the necessary licenses and permits to operate in the location you have chosen. For instance, a restaurant could be required to have a vendor’s license from the town while the local health department may require passing a food hander's safety course.

Once these seven steps are taken, a business is ready to cut the ribbon and ringing up sales. Be sure that you have established a business bank account for deposits and operational expenses and a payroll account to pay workers. Your local bank will gladly work with you to set up merchant services (credit card processing).

Join the local chamber of commerce, which can be instrumental in supporting the start of a new member organization. An active chamber will be able to set up a ribbon-cutting event with local officials and offer benefits, including networking events and opportunities to email the membership list.

Getting people in the door on the first day is important. However, the key to developing a success business is to keep them coming back. Always deliver on the promise and make sure the service is top notch. Encourage your satisfied customers to write reviews on Yelp, Facebook, and other social media outlets. This helps build buzz and creates positive word-of-mouth.

Just as importantly, contact unsatisfied customers to find out how you can improve and win back their trust. If someone has posted their grievance on social media, reach out to them politely. Even if that one person cannot be satisfied, if you respond professionally in a public forum, you will win the respect of others who view the post.

Be sure to put enough marketing firepower behind the launch. Posters, mailers, advertising via digital and traditional media, and social media outreach are as important now as they have ever been. Keep the foot on the throttle and work hard to build your business.
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Southbourne Group Singapore, Tokyo Japan

Author:Southbourne Group Singapore, Tokyo Japan
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