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Capital Gain #1

Preparing for the downturn

While it's premature to say that we've hit the top of global economic recovery, it's fair to say that we've hit some resistance. However, it's also fair to say that the markets have been (overall) shrugging off rising geopolitical tensions, policy-induced risk, and the ongoing threat of higher interest rates.

It doesn't seem that the growth is about to stop or that we're about to end the market cycle, so no need to end the party prematurely. But, caution might still be advised, as the probability of a recession only increases as time goes on.

We all know that cash is king, so maybe it's time to start building up our reserves for when the cycle finally ends. After all, this is the "new normal".

What to look for in a company

A few years have now passed since I attended my first startup event. Truth be told, the glamour and hype of the startup world didn't appeal to me as much as business models, product design, and startup management. Heading straight to the more "academic" aspects of entrepreneurship, I often heard experienced investors and mentors say that the most important component of a startup is its team.

Fast forward a few years and now I am more focused on established businesses, corporations, and stock markets. And, I have found that the same concept applies to big corporations as it does to startups: the core of any successful business is its people.

As one of my mentors once told me, the world is not in shortage of innovative products or big ideas; it's teams that are able to execute that matter the most. Whether it's two founders working out of a small incubator office or an entire executive team of a Fortune 500, look for teams that you can trust to get the job done.

A tech revolution that isn't happening any time soon

Artificial intelligence and the blockchain, two of the biggest buzzwords out there today. They're also reportedly set to revolutionize the banking and finance industries.

But, comparing and contrasting the advancement of these technologies to how the behemoths of finance are adopting them, I'm less optimistic than I was a year ago. The industry is too cautious in its approach and smaller, more agile organizations (i.e. fintech startups) seem more capable of spearheading the tech revolution in finance.

But, the big boys could still come out on top. Key word: acquisitions.