If you’ve attained your objective for your emergency fund savings but want to keep saving more money, you may be wondering what the best way to do this is. Fortunately, there’s one extremely worthwhile solution: investment management. Let’s examine what this means and how this service can help grow your money.
What Is Investment Management?
Investment management — which is also sometimes called “wealth management” or “money management” — is the process of buying, selling, and handling financial assets. This type of management generally involves creating a plan (short or long-term) that includes goals for your investment portfolio. Tax services, budgeting, and banking are all typically part of investment management as well.
Investment managers can have either institutional or individual investors as clients. The types of financial assets and securities these professionals handle include stocks, bonds, real estate assets, and securities. According to a study conducted by the newspaper Pensions & Investments and research and advisory firm Willis Towers Watson, there were more than $100 trillion in assets under management (AUM) globally by the end of 2019.
How Investment Management Services Can Grow Your Money
There are several ways investment management can help grow your wealth.
Stock Market Investments
One of the most effective ways to grow your money is by investing in the stock market. Although equities carry higher risk, you can potentially enjoy high returns (“yield”). With stocks, you can earn interest on interest and accumulate a large amount of savings even after beginning with a modest sum.
Furthermore, index funds and target-date funds also make investing in this market easy. If your employer offers retirement plans such as a 401(k) (matching or not) or Roth Investment Retirement Account (IRA), take advantage of this as well. Some exchange-traded funds (ETFs) and mutual funds also carry no expenses, so be sure to consider this alternative option. If none of these are available to you, consider opening a savings account at your local bank.
Pros of Investment Management
There are four notable advantages to investment management services. Here’s a closer look at these benefits.
The first advantage of investment management is that you’re getting advice and assistance from an experienced professional. Investment managers fully understand the nature of each type of financial asset and the pros and cons (i.e. risks) associated with each one. Therefore, don’t hesitate to enlist their services.
Investment managers also have a responsibility or “due diligence” to help you as full-time workers. This means that ideally, you shouldn’t choose someone who only offers these services on a part-time basis. It’s alright if these professionals work full-time but have other clients besides you, however.
Ability To Outperform the Market
Because investment managers know the stock market so well, they can often accurately predict how certain securities will perform. Although it can be especially difficult to “time” or “beat” the market during periods of volatility (like much of the recession caused by the COVID-19 pandemic), an experienced investment manager will always strive to offer you informed advice.
Ability To Protect Portfolios During Downtimes
In a given year, there are nearly always “downtimes” — periods where there is little to no economic activity. However, it’s critical to stay alert and not let your guard down during these periods. An experienced investment manager should be able to keep your portfolio safe during downtimes, no matter how much money is in it or the types of assets and securities it contains.
For all these reasons, investment management services can help you substantially increase your wealth. Before hiring an investment manager, however, be sure to do extensive research and have your primary financial goals in mind.
Speak To The Investment Management Experts
Reach out to the professionals at Inflection Advisors to learn more about the benefits of investment management services. We’re a financial planning firm dedicated to serving many different types of clients throughout the Los Angeles area. Regardless of what your current financial situation or history is and what your objectives are, we aim to optimize your financial well-being.
Our five-step process for ongoing financial growth starts with data gathering to understand your short and long-term goals. It continues with an analysis stage, followed by recommendations for how to attain your objectives and an implementation phase, where the plan is rolled out. The process ends with routine monitoring to ensure that you’re on track to meet all of your goals. This could take the form of monthly or quarterly meetings, either in-person or over the phone. Call Inflection Advisors today at (424) 372-8399 or contact us online to schedule a consultation with a member of our team.