If you’ve been making investments for a while, you might routinely check your portfolio. A portfolio includes any financial assets you have, including stocks, bonds, mutual funds, and private investments. Some people hand their portfolio to a financial advisor and let them handle the rest, but this isn’t always the best idea. A financial advisor might be looking to sell your products or services so they receive a bonus. You might also find that the fee you pay to the advisor prevents investing from being lucrative.
Whether you’ve handed your portfolio to someone else or you’re ready to try investing for the first time, here’s why you need to take matters into your own hands.
It’s less complicated than you think
With the right online portfolio rebalancing tool, it’s easier than ever to manage your own investments. Just set a target allocation and automate your investments. The system will figure out what trades to make in order to keep your portfolio balanced. A balanced portfolio is simply one that fits your risk tolerance (how much risk you’re willing to take) and your current financial situation (how much cash you have to make investments).
It’s a good idea to start investing early since your risk tolerance will decrease as you get older. People who start to have kids or buy their first home will be less inclined to risk money, so take those chances while you’re young. It also makes sense that the less you have, the more aggressive you need to be, so it’s okay to take big risks when you don’t have much to lose.
With an online portfolio manager, you can keep track of your investments without worrying. Just create a target portfolio and buy funds to reach your goal. If you’re struggling to get the hang of it, you can consult with an expert or read a book to learn more about investing. Once you learn the ropes, you’ll be a pro in no time.
You’ll save money by tackling it yourself
Paying a financial advisor to manage your portfolio is often more expensive than it’s worth. An advisor might charge a flat fee of a few thousand dollars or take out a percentage of your account balance. If you’re just starting out and don’t have a lot of money to invest, paying a 1% fee can feel like a real hit.
If you’re feeling really lost, it might be a good idea to hire someone just for an hour to walk you through setting up your portfolio. They’ll charge a flat rate and you’ll learn what you need to know to make good investment choices. Don’t just hire a financial advisor and pay him or her thousands. Take a look at what you already know about investing and decide what will suit your needs. You might find that you already know what you need to in order to set up a great portfolio
You’ll feel in charge of your finances and your future
Investing can make you feel like you’re doing something great with your finances. You’re investing in the future and looking out for yourself and your finances. When you leave your portfolio in the hands of someone else, you don’t feel quite as in charge. Manage your own portfolio and you’ll always know how your finances are doing.
When it comes time to take out a home loan, you’ll know exactly how large a mortgage payment you can afford and how much you have for a down payment. Learning mortgage 101 is no more complicated than learning how to manage your investment portfolio, so you’ll be prepared when it’s time to decide your loan type and loan amount. Take charge of your future by managing your own money.
If you’re looking to invest, start learning everything you can about the market conditions and your investment portfolio. Take charge of your finances and you’ll have that first home in no time.