By the time you’re in your mid 50’s or early 60’s, you need to have amassed a retirement fortune to sail you through the coming few decades. At this time, your primary focus will be looking for ways to simplify your life and finances. If money and investing are no longer your top priorities, then you’ll be keener on forms of investment management tasks.
Depending on which one is more suitable for you, here are a few strategies that can guide you on how to manage your investment wisely:
1. Do it yourself (DIY) investment management
The costs associated with DIY investment management are mutual fund fees, and Exchange traded fund (ETF). If you don’t sell frequently or choose to invest in fee funds that will cost you less, then this will be the most cost-effective investment management approach. If you want the DIY route, ensure you are well versed with investment concepts like asset allocation and rebalancing as well as implementing your asset allocation in line with your risk preference.
2. Free financial advice
If you prefer someone walking you through basic investment questions, you can consult a financial advisor at a discount broker. Most of them have basic investment knowledge and are likely to answer questions at no charge. Besides talking you through asset allocation, they can also suggest some low fee index funds relevant to the markets. Free financial advice won’t be a full-fledged business plan so when choosing this option, ensure the fundamental investment concepts are at your fingertips.
3. Fee-only financial planners with limited visits
These credentialed financial professionals have hourly rates or charge a fee-for-service rendered. If your financial position isn’t severely off, but you need another pair of eyes to review it, then a fee-only financial planner could benefit you. They can offer suggestions and provide recommendations. Before hiring one, establish what exactly you’ll need from them not forgetting the costs involved.
4. Money managers
If you want your entire investment and financial management to be handed over to a pro, then you’ll be best off with a financial manager. A firm whose services is provided on a client best interest basis should be a priority. Trading education offered at MF&Co. Asset Management provides market-beating returns on a risk-adjusted basis and creates value for clients. If you allow, some companies can also trade securities on your behalf. The initial set-up with a money manager is quite tiresome, but once the transition is complete, there’ll be less hands-on investment management. It’s also wise to know the management fees in advance as well as the adviser’s investment philosophy.
5. Robo advisors
These are lower cost options for financial and investment management. Robo advisors are multi-dimensional and can create investment portfolios in line with your goals, timelines and risk levels. They also rebalance assets and provide a host of investment-related services such as tax loss harvesting and best-investing styles. Endeavor to fully understand the firm’s fees before signing up with a robo advisor.
When it comes to managing your investment wisely, there are no two ways about it. You have to get it right. It has always been said that the higher the risk, the greater the returns, but that’s not always the case. Don’t gamble with investment management practices; instead, take time to find the most appropriate strategy to help you manage your investment wisely.