Making Every Dollar Work for you with an Investment Management Firm
You wouldn’t try to navigate a foreign country without a map, and yet 54% of Americans don’t use a financial advisor, let alone an investment management firm.
The investment world is a rocky and complex one to navigate, with winding paths that can change in an instant. Industries rise and fall, and getting to the peak of your investment potential requires a solid understanding of those sectors, their investment classes, and the sound strategies that can leverage their potential best.
There are many pathways that seem to lead to the top, but high-risk, high-return investments can be fickle, so you need a tour guide who can direct you to the stablest routes towards financial independence.
Finding Stability in an Investment Management Firm
Every dollar you own should have its own job, whether as a part of your debt management strategy, savings, or investment plan, but life transitions like marriage, a growing family, and retirement change your needs. To complicate the issue further, there is no best practice for every investor, so no investment management firm should have a cookie-cutter portfolio.
Your risk aversion (or lack thereof) and unique life circumstances are as important as your age, income, and retirement goals. An investment firm will help you to build a solid portfolio that fits your personality and circumstances like a bespoke suit.
Overcoming Emotional Investment
Since the great recession of 2008 ended, some stocks have generated well over 200% returns. Only 31% of Millennials have held stock since 2009. The dip in ownership points to a tendency to invest in emotions instead of common sense. It’s difficult to resist fear when your life savings are on the line, but resist, you must. One of the easiest ways to lose your portfolio is through reactivity and frequent strategy changes.
Risk-averse investors can erode their portfolios through reactivity alone, a habit that investment management firms overcome through their knowledge of historical returns and industry projections.
This kind of knowledge takes many years to gain and daily reading to stay current on. It takes 10,000 hours to master something, and in the investment world, that skill demands constant vigilance. Professional investors keep their eyes on the industries they leverage, using historical behavior to predict highs and lows. Few investors have the time to gain that knowledge, let alone the ability to make projections based on past behavior.
Coping with Risk
A diversified portfolio can be a volatility-resistant one, but as a layperson, it’s difficult to keep up with what “diversified” means in the current climate. Your investment management firm will build a portfolio strong enough to stand in the heavy economic wind. Your money is a powerful tool best wielded by a firm who has the skill to maximize its potential.