Significance of Investing Money

As we embark on this exploration, we will delve into the forces that drive stock market fluctuations, uncover the strategies that savvy investors employ to weather volatility and unveil the potential opportunities and risks that arise in the wake of these dynamic market movements. By gaining insight into the nature of stock market fluctuations we equip ourselves with the knowledge and tools to navigate this captivating realm and make informed investment decisions that stand the test of market turbulence. 

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1. Investment Style of Investors 

Investors navigate the financial landscape with a diverse array of investment styles, each a reflection of their individual preferences and strategic philosophies. From the disciplined calculations of value investors seeking hidden gems in undervalued stocks to the visionary outlook of growth investors pinpointing tomorrow’s industry giants, the tapestry of investment styles weaves a complex narrative. Income investors are drawn to stability and yield build portfolios anchored by dividend-paying stocks and income-generating assets. Meanwhile passive investors harness the power of market indexes to match broad market trends, adopting a patient stance that believes in the collective wisdom of the market. Contrarian investors and the trailblazers of the market venture against prevailing winds while socially responsible investors merge financial objectives with ethical considerations weaving a fabric of conscientious investing. Whether following quantitative models, endeavoring to time market waves or embarking on a nuanced combination of styles, investors embark on a dynamic journey navigating risk and reward and shaping their financial futures with the brushstrokes of their chosen investment style. 

2. Active Investing 

Active investing is a dynamic approach that places investors in the driver’s seat of their portfolio actively making tactical decisions to potentially achieve superior returns. This strategy involves ongoing monitoring of market conditions, economic data and company-specific information to identify opportunities for buying or selling securities. Active investors often rely on fundamental analysis with technical analysis and sometimes even quantitative models to inform their decisions. While the pursuit of higher returns is a driving force behind active investing it requires a deep understanding of financial markets with a willingness to conduct thorough research and a level of comfort with the inherent risks of frequent trading. The active investor’s goal is to ‘beat the market’ by capitalizing on short-term price movements and market inefficiencies. It is important to note that active investing also comes with higher costs including trading fees and potential tax implications which can impact overall returns. 

3. Passive Investing 

Passive investing offers a hands-off yet disciplined approach to wealth accumulation emphasizing the power of broad market exposure and long-term growth. This strategy involves investing in index funds or exchange-traded funds (ETFs) that replicate the composition and performance of a designated market index. Passive investors believe that over time the collective strength of the market will lead to consistent growth. This approach is characterized by lower costs compared to active strategies as it involves less frequent trading and minimal research. Learn about how2invest Passive investors recognize that attempting to ‘beat the market’ through active trading can be challenging, especially considering the fees and potential risks associated with frequent trading. 

4. Investor Budget 

An investor budget serves as a cornerstone for building and maintaining a successful investment strategy. Rooted in the principles of financial prudence, this budget allocates a designated portion of investors income towards investments affirming investors commitment to long-term wealth creation. It harmonizes investors’ current financial obligations and lifestyle choices with investors’ future aspirations making room for both present enjoyment and the cultivation of a robust financial foundation. By setting aside a consistent portion of investors income for investments investors lay the groundwork for compounding growth and the realization of investors financial goals. An investor budget not only fosters discipline and financial responsibility but also empowers investors to take charge of investors’ financial destiny ensuring that investors’ hard-earned money is strategically positioned to work for investors in the realm of investments. 

5. Risk Tolerance 

Risk tolerance is a compass that guides investors through the unpredictable seas of financial markets. It encompasses both the financial capacity to weather potential losses and the psychological disposition to withstand market volatility. An investor’s risk tolerance is a unique blend of personal factors including financial goals with time and horizon income stability and emotional resilience. Those with a higher risk tolerance are comfortable with the prospect of higher potential returns but are also willing to endure significant market swings. In addition, investors with a lower risk tolerance prioritize capital preservation and may seek more conservative investments even if it means potentially sacrificing higher returns. Understanding one’s risk tolerance is paramount as it helps strike a delicate balance between the pursuit of growth and the preservation of capital with aligning investment choices with individual preferences and long-term objectives. 

Conclusion 

From active seekers of market inefficiencies to passive believers in the power of long-term trends, each approach weaves a unique narrative that reflects individual goals with risk appetites and beliefs. Whether navigating the highs and lows of active trading or harnessing the steady course of passive investing and the underlying principle is clear informed decisions discipline and a thorough understanding of one’s financial landscape pave the way to success. 

The post The Most Appropriate Investment Plan appeared first on Modern Marketing Partners.

Here are some ways that collaboration between chief financial officers (CFOs) and chief marketing officers (CMOs) can create synergy to drive the business forward.

Alignment of Business Objectives

Too often, marketing and finance divisions operate in separate silos rather than working in sync. Or marketing may be brought in late in the budget cycle rather than having a key voice in the accomplishment of business objectives.

By working together, CFOs and CMOs can collaborate on business objectives. This means that marketers aren’t merely executing a plan based on a decision made by another member of the C-suite, but they have an active voice in shaping corporate strategy.

If nothing else, a collaboration between CFOs and CMOs can lead to an agreement on company priorities and can ensure that business leaders are working toward the same goals.

Alignment of KPIs

Historically, CFOs and CMOs have spoken different languages when it comes to accomplishing the company mission.

Naturally, CFOs are driven by hard, quantitative data such as revenue, cash flow, and other core metrics. But marketing professionals commonly rely on a broader set of information, including qualitative data such as market sentiment analysis or brand awareness.

Additionally, while financial experts look at historical data, marketers often rely on future data from focus groups and the results of upcoming marketing plans.

Bringing these two mindsets together is no easy task. But by creating stronger partnerships, CFOs and CMOs can bridge the gap between their departments and learn how these key metrics overlap and reinforce one another.

As a result, companies can develop a comprehensive growth strategy that accounts for both the hard data of the financial professionals as well as the metrics critical to marketing teams.

Improved Decision-Making

Once objectives and KPIs are aligned, CMOs and CFOs are better equipped to contribute to the company’s decision-making process.

By bringing CMOs and CFOs together early in the budget process, companies are able to make decisions that account for the metrics that matter to marketing teams.

For example, CMOs can help companies consider how an upcoming decision might impact the company brand. Or a CMO can introduce past marketing data — such as customer testimonials or feedback from focus groups — to guide future decisions.

Similarly, CFOs can provide CMOs with a clearer understanding of the ROI of current marketing strategies. CMOs can use this data to improve or reevaluate marketing plans or devise a strategy that centers on what yields the best results.

Increased Efficiency

With better communication comes greater efficiency. And by understanding the metrics that matter to CMOs and CFOs, each department can allocate resources more efficiently to contribute to the company’s growth.

This means that CFOs can help CMOs recognize the impact of their marketing plans on the company’s bottom line. Likewise, CMOs can explain the potential benefits of rolling out a new marketing strategy.

Partnerships between CMOs and CFOs can also improve the efficiency of the C-suite as a whole. By aligning departments with a common goal, it will be far easier to hold discussions and communicate about future decisions.

This is especially important during the budgeting process. CMOs can influence the way money is allocated toward marketing plans and promotional events, ensuring a smoother planning process for the entire company.

Greater Flexibility and Resilience

In an uncertain world, businesses need greater agility to navigate rapidly shifting economic conditions. This happens to be where CMOs and other marketing teams can be particularly helpful.

Many businesses are experiencing the sting of inflation as consumers are moving away from “nice-to-have” purchases to focus on absolute necessities. Successful companies are learning to reposition themselves and demonstrate how their goods and services address customer needs. CMOs can help shape this message to continue connecting with their customer base.

Similarly, CMOs can rely on the best data from CFOs, showing the overall ROI on their marketing campaigns. This allows teams to adapt to new needs and refine their strategies accordingly.

Through these partnerships, the company is better poised to remain resilient even in the face of economic challenges and changing consumer expectations.

Understanding the Evolving C-Suite

Increasingly, the most powerful corporations are relying on more than just the CEO to make strategic decisions. Instead, management rests in the hands of a series of professionals, each of whom represents a larger team actively serving the company.

The more companies can foster strong partnerships between members of the C-suite, the better they’ll be able to make business decisions and adapt to changing economic conditions or industry trends. CMOs and CFOs can be leaders in this capacity, providing a model for strong collaboration across departments.

Learn more in Digital Transformation Supports Marketing and Finance Collaboration

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When it comes to departmental differences, there’s perhaps no greater dichotomy between marketing and accounting. These career paths tend to attract dramatically different personalities and offer contrasting experiences in their day-to-day work.

However, one cannot survive without the other.

There’s a surprising amount of overlap between marketing and accounting initiatives. The better firms can bridge that gap, the more collaborative and productive the company will become.

Here are six ways marketing and accounting can work together to create the proverbial dream team.

Through HR, Recruitment, and Hiring

Recruiting and the hiring process is a sweet spot where accounting and marketing come together under the umbrella of human resources (HR). Regardless of which position a company is hiring for, it’s important to have feedback from all three factions before moving forward. Accounting helps set the budget and plays an integral role in the onboarding process, while marketing contributes brand feedback to help attract top talent. 

Some brands even incorporate marketing in the minutia of the hiring and onboarding process. For example, the team could be called upon to review the tone and language in onboarding materials or add brand elements to paystub templates (see an example here: https://www.thepaystubs.com/paystub-sample-templates) or invoices.

This example alone highlights why a collaborative company culture is so integral for success. However, that’s just the beginning of where these seemingly opposing departments come together.

Setting Prices and Understanding Margins

When a new product or service is in development, it’s the marketing team that ultimately sets the price. Those familiar with the world of marketing know all about the Four P’s: price, product, placement, and promotion. 

Several factors influence the price of a product. The supply and production costs play a role, as do profit goals and customer demand— all of which are determined via intense marketing research. As a part of that research, marketing often relies on accounting for inventory and cost analysis. 

For marketers in innovation and new product development, it’s integral to get buy-in from key members of the accounting team. Fostering those relationships will help with creative problem solving when a pricing issue arises and push projects forward against deadlines.

Forecasting for High-Level Company Financials

Accounting and finance are typically in control of forecasting and making projections for the company’s financial future. In a publicly traded company, data accuracy is critical for presentations to the board and shareholders. 

Marketing and accounting must work together during this process to ensure data accuracy. The marketing team will be able to present research-backed data, while accounting will have an in-depth knowledge of historical data and other influences that could invalidate the data. Having an open dialogue and fostering a relationship of understanding is a must for accuracy between these two departments.

Understanding ROI for Campaigns

There are several areas in which a return on investment (ROI) should be assessed within marketing. Looking at the sales generated from a campaign is a simple data point by which to measure success, but it’s a relatively small picture.

Accounting can help calculate customer lifetime value (CLV) and work with marketing to assess ROI at a higher level. This collaborative effort can highlight which products have the most value and which efforts are falling short. 

Tracking Expenses and Budgets

Marketing managers are often tasked with the responsibility of overseeing departmental budgets and expenses. However, it’s accounting that enters and uses this data for reporting purposes. 

At a simple day-to-day level, accounting can help determine if expenses are hitting the right accounts or if any errors have been made. At a bigger-picture level, accounting can advise on where the value lies and where cuts should be made.

Improving Cohesion and Eliminating Silos

In summary, bringing accounting and marketing together helps eliminate silos and move away from an archaic, divided work environment. This shift promotes better team cohesion and a collaborative workspace that helps a company thrive.

The post 6 Ways Marketing and Accounting Overlap appeared first on Modern Marketing Partners.

Therefore, if you’re seeing investment banking as a career, here are some basic things you should know about the industry and to help you understand the fundamentals of this career.

Modern Outlook

Nowadays, the summary of wholesale clients that want more sophisticated financial products than mere intermediating between them and investors is slightly shapeshifting the definition of job – to a more engaging and creative outlook.

Back in the day, investment banking was just a go-between government, corporations, and institutions that needed capital raising and investors who have the money to invest. Now, it can involve brokership, but also mergers and acquisitions, and offering general financial guidance to their clients.

Financial advising doesn’t just mean they help their clients boost money – there is also delivering stock, making sure bonds are buoyant, acquisition bargaining, or regulating the sale of the client’s company as well.

Financial Degree Doesn’t Matter

All this smart-talking in terms sounds like this job is reserved only for people from the finance field or anyone good with numbers and money but, very recently, it is discovered that students from non-target schools without perfect GPAs are actually battering Ivy League students. And if you’ve ever wondered how to become an investment banker, the odds are more than in your favor. These factors are valuable to consider, throughout your education, in order to smoothly step into investment banking:

• A network you build – the connections you make with high-ranking positions (peers, faculty professionals, managing directors, or vice presidents) in the industry.
• School you attend – sure, big investment banks only recruit from the best schools, but it doesn’t necessarily mean that you’re not going to be appreciated.
• Experience you gather – if you know how to do the job because you’ve done enough internships, it’s what officially counts.
• The resume you make – a properly structural, analytical, and investment-based resume that transmits the right information is a must.

Persistence

In this industry, tenacity is key.

From working with major companies, or even governments to dealing with financial moguls – physical stamina is needed, but not as much as a mental one. The investment banker has to be persistent, accessible, enthusiastic, prompt, and sharp.

These merits are thought from the start – when looking for the job opportunity, all the researching, resuming, networking, building connections, teach patience and perseverance, while continuing the search and looking for a starting place.

No Borders

Large companies, businesses, and even governments are trading and investing in each other, making something that is called “a global market”. And investment banking is swimmingly working its way between different currencies, investment regulations, and spending diversities.

Besides, if you enjoy traveling, foreign relations and generally working internationally, with different people, speaking different languages – this is definitely a positive feature and the right industry for you.

Support and Reliability

One of the associations with Wall Street is definitely corruption and unethical behavior and, although it cannot be completely averted, the majority of banks are now showing zero-tolerance to this kind of behavior. Seeing their candidate or employee is loyal and hardworking, building trust and support between their clients, has become the most important factor for them when hiring a candidate or moving them down the line of more important clients, cases, and professional advancement.

This practice is creating a much better work environment and getting more businesses to support and trust investment banking.

Flexible and Growing Industry

Investment banking is an industry, an area that has been around since the first need of negotiating between a retail demand and supply.

Recently, the industry has also experienced growth thanks to pandemics and increased wholesale needs. The adjustments to new job requirements such as adaptation to home working conditions, no on-location due diligence, virtually carried out tours, and remotely done negotiations… has just shown how much is investment banking a resilient industry and how it continues to grow.

Professional Terms

Very often, there is a certain perplexity between investment banking and the investment banking division (IBD) but not only that those are different areas of the bank, but one has a more extensive range of services than the other. Although you can expect raising capital and assisting in the negotiation by any IBD, investment banks, on the other hand, offer:

• Increasing capital by selling stocks and bonds to buyers. This function, known as “underwriting”, serves the primary market.
• Negotiation of M&As (mergers and acquisitions) between the seller and investor, closely following the whole process.
• Sales and trading of the client’s own capital serves the second market.
• The “coverage” or equity research is based on researching the market and help investors to make investing decisions.
• Lastly, managing investments for a wide range of investors, or asset management.

Conflict of Interest

Since this industry is bound to have some kind of criticism and thanks to its very intermediary nature, the possibility for conflicts of interest is at the very center. How large corporations, brokerage firms, investment, and retail banks maintain confidentiality between the different sectors within them? By creating ethical boundaries between these departments.

The self-regulating business involves a literal virtual barrier expected to prevent the exchange of information between different units, especially if data is ethically or legally uncertain or controversial.

Diversity Programs

Unfortunately, the demographic structure of investment banking was, and still is, overshadowed by white men. On every job position in the industry and on the board of seniors, there’s a largely male, predominantly white, and economically privileged troop.

Fortunately, the banks are aware of this social imbalance and many of them are already leading and supporting diversity programs that actively enlist promising diverse categories to the field – female, LGBT population, African-American, Hispanic, or disabled.

The industry’s future and past are steadily and heartily meet, intertwine and renew.

Although its top jobs are still dominated by white men – women and minorities are slowly but firmly getting their pieces of cake of this adaptable and ever-changing industry, which is full of possibilities to learn, grow, earn and see the world.

The post 9 Things You Need to Know About Investment Banking appeared first on Modern Marketing Partners.

Each year presents new challenges to businesses, but no one could have prepared for what 2020 would bring. With the political, economic, and social issues, compounded with the ongoing Covid-19 crisis, brands have struggled to cope.

Doing business through a global pandemic has been difficult. However, as FirstLight Home Care CEO Jeff Bevis highlights, some of the changes taking place now may force businesses to be more adaptable and resilient, which isn’t a bad thing. The challenge for you now is to monitor these changes and adjust accordingly. Here are some of the things that every business owner should have learned from 2020:

Be open to innovation

Quarantines and lockdowns have changed customer behavior and movement, so brands need to think creatively to stay relevant. In an article on ‘How Coronavirus Helped Brand Innovation’, we discussed how a business has to offer more effective products or find ways of delivering these products in response to customer needs.

With consumer brands being some of the hardest-hit by the coronavirus crisis, they’ve had to come up with creative ways to sustain their businesses. Malls have had to rethink and come up with new strategies, like how the South Coast Plaza Mall repurposed its parking lot in Costa Mesa, California to accommodate an open-air shopping area for brands like Omega, Prada, and Versace—hot commodities in Orange County. Another brand that allows its patrons to enjoy in-demand goods is Boston restaurant, Mei Mei. Their creative DIY dumpling kits, equipped with instructional YouTube videos, have inspired several other restaurateurs to take similar steps.

Be attentive and flexible

Recognize when things stop working for you and let sound judgment lead you—whether that be towards a new marketing strategy or a remodel of your business’ legal structure itself.

Of the 163,735 businesses that have closed in the U.S., 60% will not reopen, Yelp reported in an Economic Impact Report this September. Many business owners have found that being personally liable for their brand’s finances has impacted their personal financial well-being. If you want to avoid this fate, then consider learning from their mistakes and changing to a different legal structure. A detailed guide to forming an LLC by ZenBusiness explains that one of the key benefits of forming an LLC is having a distinct separation between personal and business assets. This means you won’t be held personally liable should things take a turn for the worse. What matters is that you evaluate whether your legal structure still works or not.

DO NOT ignore digital marketing

Americans have spent more time on and become more reliant on the internet this year. This has meant that the market has gone digital, and ignoring that fact is an affront to your brand.

Audience sensitivity should be the first consideration when you venture into digital marketing. Gather insights from your audience and make sure that your message is aligned with theirs. It’s a scary time for consumers and coming off tone-deaf could be disastrous for your brand. When you’re able to connect with your market on an emotional level and tap them across various platforms, you can work on building trust. The Atlantic foresees how effective pandemic-time advertising would allow your audience to look to you for reliable products or services even after the pandemic.

Put your people first

This period of prolonged uncertainty has triggered intensified risk management and agile work arrangements for many brands. It’s important to be able to assure your employees that they will be taken care of to increase their morale during the pandemic and loyalty after.

Invest in your people by anticipating future trends and behaviors to accommodate their needs and providing health support, which includes psychological well-being. The SHRM outlines how this can be done by simply encouraging your employees to spend more time outside and recognizing their work.

Over-prepare

There’s always room for more preparation and 2020 has been the definitive proof of that. Learn how to anticipate and forecast market trends so you can plan around those deliberately.

You know that brands are shifting to digital, so take that first step and craft your digitally-charged marketing strategies now. You can go through our collection of ‘8 Marketing Faux Pas to Avoid in 2021’ for some tips, for instance, you can learn about the importance of SEO building online which helps you rank up on search engines as well as banking on PR moments that could boost your brand awareness.

This has been a year of both unprecedented challenges and unprecedented solutions from businesses. There’s no guarantee that things will be better next year, and even if they won’t be, it’s up to you to make your brand better using everything you’ve learned this year.

The post 5 Business Lessons You Should Have Learned In 2020 appeared first on Modern Marketing Partners.

Back to our title, like other functional areas, digital transformation is embraced by marketing and finance; providing new opportunities for collaboration between previously “siloed” or even adversarial departments. Following are details on how marketing and finance can collaborate, along with the Top 10 Marketing key performance indicators (KPIs).

Today, marketing technology (MarTech), marketing automation, and Customer Relationship Management (CRM), supports detailed and timely reporting including analytics, sales conversion data, return on marketing investment (ROMI), and other KPIs (Top 10 Marketing KPIs below). While finance and accounting employ Business Intelligence (BI), Financial Planning & Analysis tools (FP&A), and other tools that support advanced sales and profitability analysis.

Before digital transformation, marketing and finance collaboration may have been limited to budgeting, forecasting, annual or perhaps strategic planning. Finance likely viewed marketing as a cost center.

With digital transformation, marketing and finance can more thoroughly integrate marketing, business, financial, and strategic planning. Marketing and finance can meet and report frequently, sharing real-time information. Marketing and finance can work as a team, investing in marketing programs and campaigns that achieve key performance indicators (KPIs), and reducing or eliminating initiatives that do not “measure up”. Let’s take a look at some of the top KPIs.

Top 10 Marketing KPIs

1. Sales conversions
2. Lead registrations
3. Return on Marketing Investment (ROMI)
4. Website analytics: unique visitors, traffic sources, bounce rates, etc.
5. Email: open rates, click through rates (CTRs), bounce rates
6. Paid Search: cost per click (CPC), sales conversions
7. Search engine optimization (SEO): Domain Authority, keyword rank, etc.
8. Social media listening and analytics
9. Average Sales Cycle
10. Customer Acquisition Cost (CAC)

Marketing and Finance Collaboration Roles and Skills

Modern marketing employs analytics, tests and optimizes campaigns, and reports on KPIs to accounting and finance teams to truly collaborate on achieving mutual objectives. This is typically the role of the Chief Marketing Officer (CMO), VP Marketing, or Marketing Director.

On the finance side, the roles might include the Chief Financial Officer (CFO), Controller, or Vice President titles. Modern Marketers and Contemporary Controllers, working together via digital transformation.

Where do you get these skills?  Marketing curriculums increasingly offer digital certifications. In accounting and finance, continuing education and professional certification is often required. Member associations like the Controllers Council, have programming and resources that support digital transformation.

Relevant Resources:

Marketing and Finance – From Adversaries to Allies

Why Collaboration Between Marketing and Finance is Essential to Growth

Digital Marketing Transformation Guide – Top 12 Strategies

Business Intelligence for Marketing – A Shiny New Silver Bullet

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