Is a Money Manager Right for You?
Is managing money the new American pastime?
Or, to put it another way, have many Americans become so focused on managing their money that they’re forfeiting the most valuable hours in the day—those they could be spending with family or pursuing interests?
Investment managers who talk with clients every day are likely to hear a recurring theme: many people feel guilty if they’re not managing their own portfolios. Although they often say they dislike and feel trapped by the role, they believe they should maintain full responsibility for money management. Clients express several reasons for this belief:
• I have to—people will think I’m not competent if I turn it over to someone else.
• My spouse (or parents or someone else) told me to always keep control of these assets.
• I’d have to pay huge fees to have someone do it for me.
• There isn’t anybody I can trust with my money.
The truth is you can trust a lot of people, and the costs of having a professional manage your money can be offset by security and potential for added investment gain. You don’t feel guilty paying professionals to do your taxes, repair your car, or use their expertise and training to perform the surgery you need, so why operate as a professional money manager when there are experts who can more effectively do the work for you?
You can be an amateur golfer and still get a lot of satisfaction out of the game—and being an amateur golfer puts very little at risk. But an amateur portfolio manager can impact his or her family’s standard of living for a lifetime. Are you really equipped to adequately do the job of managing your money? To find out, consider the following questions:
• How much experience do I have in investing?
• Have I prepared a defined investment strategy, and do I have the discipline to stick to it?
• Do I have the correct asset allocation balance to meet my objectives?
• Do I realize that my asset allocation decisions will have a greater effect on the growth of my investment portfolio than any stock pick or choice of fund?
• Do I faithfully keep accurate and timely information on basic reinvestment, income earned, tax events, etc.?
• Do I know what my track record is after inflation, commissions, fees, and taxes?
• Am I really saving money considering commissions, fund expense ratios, and accountant and tax preparation fees?
• Have I talked with a professional portfolio manager to see how much control I can maintain?
• Do I have access to up-to-the-minute investment research?
Armed with responses to these questions, you’re in a better position to determine whether you should use a professional portfolio manager or continue doing it yourself.
If you elect to place your portfolio with a professional investment manager, consider looking to your bank for this service. Many people think of banks for loan and deposit services but overlook them for quality investment management services. Yet, independent rating organizations have consistently ranked banks high among money managers, and banks are always happy to provide you with their long-term investment track records.
You’ll get personal attention from a financial professional who knows you and your family’s needs, and she’ll be happy to help you define your objectives and assist in designing solutions that work for you. TPW
Or, to put it another way, have many Americans become so focused on managing their money that they’re forfeiting the most valuable hours in the day—those they could be spending with family or pursuing interests?
Investment managers who talk with clients every day are likely to hear a recurring theme: many people feel guilty if they’re not managing their own portfolios. Although they often say they dislike and feel trapped by the role, they believe they should maintain full responsibility for money management. Clients express several reasons for this belief:
• I have to—people will think I’m not competent if I turn it over to someone else.
• My spouse (or parents or someone else) told me to always keep control of these assets.
• I’d have to pay huge fees to have someone do it for me.
• There isn’t anybody I can trust with my money.
The truth is you can trust a lot of people, and the costs of having a professional manage your money can be offset by security and potential for added investment gain. You don’t feel guilty paying professionals to do your taxes, repair your car, or use their expertise and training to perform the surgery you need, so why operate as a professional money manager when there are experts who can more effectively do the work for you?
You can be an amateur golfer and still get a lot of satisfaction out of the game—and being an amateur golfer puts very little at risk. But an amateur portfolio manager can impact his or her family’s standard of living for a lifetime. Are you really equipped to adequately do the job of managing your money? To find out, consider the following questions:
• How much experience do I have in investing?
• Have I prepared a defined investment strategy, and do I have the discipline to stick to it?
• Do I have the correct asset allocation balance to meet my objectives?
• Do I realize that my asset allocation decisions will have a greater effect on the growth of my investment portfolio than any stock pick or choice of fund?
• Do I faithfully keep accurate and timely information on basic reinvestment, income earned, tax events, etc.?
• Do I know what my track record is after inflation, commissions, fees, and taxes?
• Am I really saving money considering commissions, fund expense ratios, and accountant and tax preparation fees?
• Have I talked with a professional portfolio manager to see how much control I can maintain?
• Do I have access to up-to-the-minute investment research?
Armed with responses to these questions, you’re in a better position to determine whether you should use a professional portfolio manager or continue doing it yourself.
If you elect to place your portfolio with a professional investment manager, consider looking to your bank for this service. Many people think of banks for loan and deposit services but overlook them for quality investment management services. Yet, independent rating organizations have consistently ranked banks high among money managers, and banks are always happy to provide you with their long-term investment track records.
You’ll get personal attention from a financial professional who knows you and your family’s needs, and she’ll be happy to help you define your objectives and assist in designing solutions that work for you. TPW