Investing successfully requires a few different characteristics and pieces of knowledge, not least of all the patience and understanding of how to reach your long-term goals. Success required careful consideration and a combination of knowledge, tools, motivation, concentration, time and advice you can truly trust.
However, which approach you take is completely up to you. As such, we have compiled a list of the different approaches you can take investing so you can judge which one is right for you.
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Go It Alone
Going it alone has its ups and downs, but requires a serious understanding of how investing works. It doesn’t matter whether you are investing in stocks and shares or if you want to get into trading, of which binary trading is extremely popular, you will need to be confident in conducting your own analysis and be able to go from there. Here will be decisions that will need to be made regarding assets, which investments are the best to purchase, buy and sell yourself, carefully monitor your portfolio and understand how to be tax efficient in your handling of everything.
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Have An Adviser You Trust
The major benefit of having an adviser is that they will be able to steer you in the right direction across the board. This will include allocation, which investment suits your budget and needs. However, the final decision lies with you as they are nothing more than an adviser. What’s more, you will still be required to have a proactive mentality, because any advice you need will need you to make contact with them. They don’t keep an eye on your portfolio or highlight any changes. So make sure you work out a great system of operating.
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Co-Manage Your Investments
This approach will take a lot of the pressures off you as your advisor will take control of a lot of the aspects of your investment. Typically, these will include analysis, recommendations, implementation and monitoring your portfolio. They will also report to you periodically. This means they will be the more pro-active party and contact you should anything need discussing, such as problems, changes, tax efficiencies, re-balances, general updates and strategic opportunities.
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Get A Money Manager
A money manager takes most of the responsibility and decision-making and will invest according to the predetermined plan you both decided to go with. A money manager will monitor your portfolio, manage your investments and make any changes that may be required, needed or wanted. In short, you don’t have a role as an influence. Instead, you play a role that is more closely aligned to that of an observer throughout the process and the results.
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Commission-Based Advice
This is an approach that is often filled with conflict because your interests may clash with that of the salesperson and the financial company. Their interests don’t often align with what is best for you as an investor, and that means you should be wary of what advice you follow. The other major issue of this approach is that you pay a commission, and not just on your initial investment because, should you decide to change investments, another commission will be charged by the financial services company you are using. However, broker-dealers usually know what they are doing, which is why they have become such massive names in the financial industry. They include brokers like Merrill Lynch and Morgan Stanley.
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