Why Diversifying your Investment Portfolio is Never a Bad Idea

Investing in not only one company but multiple companies in various industries is the key to obtaining a successful startup investing portfolio. This is one of the most important pieces of advice you can receive, whether you’re investing millions of dollars or even just hundreds of dollars. Diversifying your startup investment portfolio will maximize the chances of receiving good returns considerably as well as minimize your risk.

Not Solely for the Rich

Before the JOBS ACT, investing in early-stage companies used to only be for the high net worth individuals. Those that did not meet certain net worth qualifications were deemed ineligible to invest in early-stage companies. The vast majority of the US population did not reap the benefits of owning shares in private companies and potentially watching their investment grow if the company succeeded. But the JOBS ACT has now provided the opportunity to every individual to invest in companies that catch their eye. 

Due to the benefits of the JOBS ACT, we (PicMii Crowdfunding) have designed a user-friendly start-up investing platform to make sure the entire population has an equal opportunity to invest in these innovative companies. But why should I as an investor invest in multiple companies?

1

Less Risk

If you invest in a single company, you’ll run a high risk of losing all your investment if that company doesn’t take off. By developing a diversified investing portfolio, it will decrease the risk of losing your money and could give you the perfect equation to receive big returns. Of course, here on PicMii, we try to make sure only the best companies will be raising capital on our site to minimize the risk for our investors as much as possible. But the risk will never hit zero.
2

Oscillating Trends Lead to Success

Trends in industries oscillate considerably. The hottest product one day may be in the rear-view mirror the next day. Just as diversifying your portfolio decreases the risk, it also increases your chances of hitting the right trend. Investing in multiple companies will give you a higher likelihood of hitting that company that has the right trend at the right time. This give you a higher likelihood of receiving bigger returns. As the old saying goes, don’t put all your eggs in one basket!

The Attraction to Startup Investing

The attraction to startup investing is obvious: the returns on your investment, at times, can be quite lucrative. an example may include Sequoia Capital Investments who netted a 50x return on their investment in Whatsapp in their early days. These large returns are what individuals search for when investing in startups, but to be fair, these types of extreme returns are quite rare in the industry as most startups fail in their early days.

However, the appeal goes well beyond just returns on your investment. There is something quite compelling and interesting about joining a community of investors in a similar startup, becoming a partial owner in the company, and having the opportunity to create relationships with the owners of the startup. Along with these core perks of startup investing, you are backing companies looking to shape the future of society and innovators looking to change the world. It’s incredible being abe to watch that first hand through owning equity in their startups.

How do I Start Investing?

By dipping your toes in multiple industries, it could lead to that jackpot company that takes off at the right time. But, please remember, a majority of the time, you will lose your entire investment. Therefore, it is never a bad idea to diversify your investing portfolio. If you want to start investing today, simply press the “sign up” button in the top right of the page. As soon as you sign up, you will be able to invest in any of our current company offerings on the platform. We look forward to seeing you join our startup investing community.

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WHEN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING. THIS INCLUDES ANALYZING THE MERITS AND RISKS INVOLVED WITH INVESTING IN THE OFFERING. INVESTMENTS ON PICMII CROWDFUNDING ARE SPECULATIVE, ILLIQUID, AND INVOLVE A HIGH DEGREE OF RISK. THIS RISK INCLUDES THE POSSIBLE LOSS OF YOUR ENTIRE INVESTMENT.

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