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Mar 3

Low-cost methods for busy professionals to manage investments

Posted by at 11:54 | Default | Comments(0) | Reads(1014)

The investment world has gone through some serious changes over the past few years. Busy professionals eager to keep their portfolios diversified don’t have to keep an eye on the market 24/7 anymore. There’s great potential for newbie investors too. Just because you don’t have millions in the bank, it doesn’t mean you can invest and make a profit. Several of the most common investment methods are robo-advisor investing, asset allocation, index funds, gold, and stocks.

Now in terms of choosing a method, this depends entirely on you and your investment strategy. Are you willing to commit to a plan, but at the same time take a risk? The investment market is not 100% secure. Bad things can happen (e.g. market crashes), so you have to understand that there’s a slight chance you can lose the money you initially invested. How much are you willing to put down in order to get a chance a living comfortably by the time you reach 60? Here are some low-cost investing methods for busy professionals to manage their investment deals.

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If you can’t afford a financial advisor or you just don’t want one, robo-advisors will help you make the best decisions. They offer automated management advice online by using robo-advisor companies. These employ the exact same software program as a human financial advisor; however, the portfolio management advice doesn’t cost a fortune. Most investment options are based on lost-cost ETFs, as well as stocks and additional types of investments.

Several robo-advisors additionally offer special features meant to help you trim added tax charges in accounts that are tax sheltered, such as IRA or 401(k). To some degree they’re extremely popular; mainly because they require minimum assets for an initial investment. Several companies don’t have account minimums; however others do require a small amount of $100/month to be permitted to invest. This makes robo-investors an excellent alternative for busy professionals who want some advice but don’t necessarily want to spend time (or don’t have the money) to consult with a financial planner.

Robo-advisor options from the best companies
Some investors consider robo-advisors to be too impersonal. But then again, there’s a sensible solution available for them too. Companies such as Personal Capital or Vanguard provide robo-advisor options assisted by a real-life financial planner. Busy investors may find this method extremely efficient. If you enjoy low cost management and don’t have a problem with using the web to make an investment, than robo-investors are exactly what you need to keep your portfolio diversified. Furthermore, this option is ideal for those with limited funds.

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Asset allocation funds
These are mutual funds pre-mixed with cash equivalent, fixed income, equities, and even alternative investment deals. Investors opting for this method are predisposed to an instant portfolio diversification. The initial fund can be easily blended and rebalanced in various ways, thus preserving a desired mix of bonds and stocks. The fund’s title gives investors clues to help him understand the way his money is being mixed. An investment portfolio that’s properly balanced is usually a combination of 50% bonds and stocks.
Target date and lifecycle funds begin with an increased stock percentage, and then they gradually become more compact as investors get near the pre-determined deadline. In most cases, we’re talking about retirement. There’s another type of fund called lifestyle fund; this is usually billed on risk levels – moderate, aggressive or conservative.

Index funds, stocks & gold
If you’re a busy investor seeking high returns, the key is to own stocks. Stocks have inflation-beating qualities, although you might want to stay away from single shares. A better alternative are index funds that span on whole markets, even on foreign markets. This way you get a chance at receiving dividends, as well as any appreciation that comes with your results without taking huge risks. If you’re thinking of investing in bonds, just make sure to own them through an index fund.

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Last but not least, we have gold. Make sure to have enough to counterbalance what you own in real estate, stocks or bonds. Intermittent re-balancing guarantees that you’ll be cashing out any gains in an appropriate timeframe; thus creating a wealth-building, compounding return while also avoiding risk. If you feel you can’t manage on your own, consult with your advisor and talk about finance software programs too. These can help you stay organized and diversify your portfolio without going broke or getting into a deal that might have severe repercussions.

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