NEW YORK—When the economic recovery finally arrives, many small business owners won’t try to rebuild their shrunken stock portfolios. They’ll be putting their money in what looks like a better bet: their companies.
Owners already have plenty of reasons for putting money into their businesses first, and those reasons are likely to remain when the economy picks up. For many, there’s the immediate need of boosting cash flow. But they’ll also be working on longer-term issues, carrying out expansion plans that have been put on hold and making the capital investments they couldn’t afford during the recession.
Moreover, with the stock market on an uncertain path and other investments paying the slimmest of returns, small business owners believe they’ll make more money by investing in themselves.
Rami Hachamoff, who has an engagement ring business in Atlanta, has lost money in mutual funds, but he’s not planning to rebuild his portfolio. Instead, he’s already on the path he expects to take when the economy is healthier. He’s withdrawing more money from his funds and putting it toward getting a retail location to help his company, Allure Diamonds, grow.
Hachamoff said the business he’s in has become more difficult and competitive over the past three years, especially as engaged couples are looking for better prices on diamond rings.
