Investors have been cautious about taking on new projects over the last 12 to 15 months. That is understandable. With the global economy left fragile by the coronavirus crisis, even the most attractive valuation report may not be enough to sway investors. Yet the world is gradually emerging from COVID’s shadow. Is now the right time to start looking for new projects?
As a provider of due diligence-as-a-service (DDaaS), we understand that there are no hard-and-fast rules dictating when to invest and when to walk away. But we also know that paying attention to one’s business surroundings can help provide clarity. To that end, we believe there are some things to consider as investors seek relatively safe projects.
Coronavirus did not hit every industry equally. Some industries were barely affected while others were completely devastated. Where do your current projects stand? If any of them are now under water, you may be tempted to try recouping some of your losses through new projects. That is not necessarily a bad strategy. Just be sure not to jump at any project without proper due diligence.
Also note that being underwater may be an indicator that you should stay the course. In other words, let things play out and re-balance themselves before you take on any new risk. There are times when staying the course is the best strategy for protecting your assets long-term.
You may be in a position in which coronavirus has forced you to change your investment goals. Perhaps you have new priorities. Maybe your vision has changed. One way or the other, changing goals may make it obvious that your current projects are not sufficient to achieving those goals. Now might be the time to just start looking for new projects that will help you change direction even as you exit current projects.
Understand there is a temptation during economic difficulties to quickly change gears in hopes of avoiding trouble. Investors prone to knee-jerk reaction don’t do well in such times. If you are confident a knee-jerk reaction has not changed your goals, seeking out new projects now might be a very wise choice. On the other hand, if you are the type of investor who is quick to react without letting things play out, caution maybe your best friend.
Wisdom In Counsel
Current trends are not so easy to forecast thanks to a number of political and economic influences. Economically speaking, the world still hasn’t fully recovered from the malaise created by the coronavirus crisis. Politically, Washington is still not stable despite nearly complete democrat control. The EU and UK are still working out their divorce while China continues to press to become the world’s only economic superpower.
We obviously recommend proper due diligence before investors make any decisions. But above and beyond the services we offer, there is much wisdom found in counseling with others. Assuming you do not invest alone, the rest of the members in your investment group all house opinions on the matter. Outside of the group, there are financial experts more than capable of offering sound advice. Utilize their services.
Now could be the ideal time for you to begin looking at new projects. Economic weakness in certain sectors offers the opportunity for you to get in on the ground floor of something that could be big. Just be smart. Exercise due diligence; gather as much information as you can; counsel with others to get their perspectives. Make your decisions based on sound reasoning rather than emotion and you will do just fine.