Managed investing is when you hand over the reins of your portfolio to a professional. It’s a way to get expert guidance on your investments, which can help you meet your financial goals, lower your risk and boost your returns.
Investing can be tricky and time-consuming. When you work with a managed investment firm, you can focus on other things while your money is being managed for you. That’s one of the reasons many people choose managed investing over DIY trading.
When you choose a managed fund, it’s important to read the Product Disclosure Statement (PDS). The PDS should tell you what type of risks the manager is taking with your money, and whether they aim for high, medium or low returns. Compare these risks to your own, to make sure they align with your investment objectives and tolerance.
If you’re considering managed investing, look for low fees. You want to avoid fees eating into your investment returns, as they can have a big impact on your long-term results. The lowest-cost managed funds tend to be index funds, which track market indices and don’t carry the same fees as actively-managed funds.
Many people who invest in a managed account have the benefit of having their portfolios diversified across different countries, assets (shares, property, bonds), industries and companies. This diversification can reduce the risk of losing a significant amount of your wealth because it means you’re not as likely to put all your eggs in one basket.
Another benefit of a managed account is having access to exclusive opportunities. For example, you may be able to invest in a small private company or fund that isn’t available to DIY investors. You might also be able to access funds with a minimum contribution that’s typically too high for retail investors.
You can also find managed investments that are specifically designed to be tax-efficient. This is because the professional guiding your portfolio will try to offset gains and losses by selling assets when it’s most beneficial to you. This is called rebalancing, and it can have a significant impact on your returns.
It’s important to remember that, regardless of the strategy used, managed investments can go up and down in value. The value of a managed investment can also be affected by events that happen in the world outside your control, such as a global political event or natural disaster.
Investing early on in your life is one of the best ways to build wealth over time, because it helps you grow your money faster than simply keeping it in cash. And it’s especially important for people of color, who often earn half as much as white households and own only 15 to 20 percent as much net wealth. Managed investing
