Strategic access to customers appreciates capital investments
Access to customers means the people making decisions must be diverse to leverage diverse views in creating new products and services that fit the needs of all customers.
Mellody Hobson is the co-CEO and President of Ariel Investments, a Chicago-based investment company. She believes that access to customers is as important as access to capital, stressing that strategic access to customers appreciates capital investments.
Mellody is currently the only female minority chair to a major Fortune 500 company. Her corporate accomplishment puts her second to Ursula Burns in the history of corporate ascension. She has worked for Ariel Investments for almost three decades. She currently functions as vice-chair at Starbucks and works as a director at JPMorgan Chase.
Diversity is essential for good investment
"Having African Americans and minorities on cooperate boards is strategic for business prosperity," she says. "The boardroom is where the power is and for a company to be world class and excel, it must understand the potential preferences of all customers in its investment practices".
"Access to customers means the people making decisions must be diverse to leverage diverse views in creating new products and services that fit the needs of all customers," she affirmed. It is not a surprise that she continually advocates for minority inclusion on the boards of all acquired companies she oversees.
Embark on long-term investment strategies
Mellody has also used her understanding of investing to change identified setbacks in capital investments practices into a positive career achievement. She is a vigorous proponent of getting an extended-term investment, also known as value stocks. Hobson is a disciplined investor herself, and her long-term method of investing showcases Ariel Investments’ slogan “Slow and stable wins the race”, that portrays a turtle to symbolize the firm’s investment approach. "When people have less value for time but put more value on money, it is financially risky," she stated.
She believes that though every type of investment can be profitable, the future of investing must tactically embody a portfolio of long-term investments. On the stock market, she shows how buying long-term stock and trading wisely in personal investments is a great way to multiply funds and acquire financial freedom. “There has been no twenty-five-year period since the stock market opened in 1896 that the S&P 500 has incurred a loss,” affirms Hobson. She continues that if somebody from her 1991 class has devoted just $1 per day into the stock market, that investment would be well worth $40,000 now.
"Whenever you become accustomed to a lifestyle on a lot less, it is possible to have more in the future. Any investment seed you start out with will increase,” says Hobson. She explains that long-term investments aren't attractive, but are profitable when filing taxes especially in the United States. Once you make a stock market sale and make profits, you will pay taxes known as a capital gain tax.
The tax bracket could either be at a short-term or long -term rates. Should you keep your investment for a year or significantly less, you pay a short-term withdrawal penalty, which may be as substantial up to 37 percent. Contrarily, long-term investment holdings over a 12 months period, makes you get away with a 0% up to a 20% lower tax charges based on your income and tax status.
"It is good to keep your investments in the long-term, because you will make more in revenue and less in tax liabilities".
Invest with diligence
Mellody Hobson’s financial guidance to any investor is to be temperate in acquiring wealth. Wanting to become wealthy too quickly causes many investors to observe the market movements and may have some momentary gains. But relying on these market movements alone may be harmful to any wealth-building objectives.
However, when you commit constantly in a long-term investment, you profit from the development in the stock market overtime. So, start off pondering a lot more on an alternative long-term investment and you will be well-off in no time! Mellody has proofed throughout her career that long-term investments are the future and can be profitable.
Enoch Antwi is the managing editor at The Business Frontal. He worked as a business and an environmental journalist in the late 1990s with the Business and Financial Times. His passion is to provide on-demand valuable information and insights on business, entrepreneurship, leadership, innovative technologies, and principles for corporate success in today's business world.