Do-it-yourself portfolios provide choice, allowing you to pick your own investments and make changes as desired. However, this approach requires constant monitoring, analysis and rebalancing. It also involves considerable ongoing time and effort.
Want a time-saving solution? Consider professionally managed portfolios, which are easy to implement and understand. These investment options provide several valuable benefits, including:
- Unmatched diversification
- Automatic rebalancing of your assets
- Minimal ongoing monitoring and analysis required
- Provides comprehensive and personalized financial reporting
Leave it to the experts
Professional management ensures you don’t put all your eggs in one basket. Since different asset classes don’t move in lock step, stocks may be up when bonds are down and vice versa. The same applies to different geographic regions and investment styles. Diversification ensures a portion of your investment is always working.
Rebalancing regularly is also important to maintain the asset mix appropriate for your financial situation, time frame and risk tolerance. Managed portfolios rebalance for you at least quarterly.
Another advantage is that managed money reinforces a long term investment time horizon, eliminating the temptation to track each fund’s performance and wonder whether to sell. A properly diversified portfolio should have components which zig and zag at different times, thus ensuring lower volatility and more consistent returns.
Options available for every type of investor
Investment management companies offer professionally managed portfolios tailored to different investor risk tolerance and return objectives. For each level of risk, there is an optimal portfolio that offers the greatest expected returns, and proper diversification increases potential return and lowers risk.
Portfolios typically range from very conservative portfolios focused on preservation of capital, all the way up to foreign and maximum growth focused portfolios. Many offer a choice of tax advantaged investments and all can easily be set up to provide regular cash flow.
Depending on your personal priorities and financial objectives, managed portfolios can consist of pooled funds, mutual funds or segregated funds. Most offer best in class multi managers. Many also provide independent monitoring and consulting assistance on asset mix and manager selection from independent asset consultants.