Investment Advice

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Category: Investments

Thinking of investing in a company that is considered ‘hot’ right now and not looking at the long-term track record of the company? You are committing a common market timing mistake! Also, don’t sell just because you feel that the prices will fall. Always use a Systematic Investment Plan (SIP) – it works better than one-time investing and helps you build for a prosperous financial future. Don’t look for shortcuts while investing, believing that you will taste instant success. Find out what you want to accomplish and chalk out an investment strategy.

What is the ideal number of stocks that you can manage, to keep your portfolio well diversified? 10-20 is believed to be a manageable number for most. Remember if you have not diversified at all, you are exposing yourself to a lot of risk and if you have diversified your portfolio greatly you won’t be able to track the performance of each company. Get yourself some reliable financial advice to keep your portfolio well diversified. If you’re investing to accumulate money for your child’s education or for your retirement, learn enough to take your own investment decisions. Acquaint yourself with the options available to you – bonds, mutual funds, fixed deposits, and small savings schemes. You could also hire a financial advisor to help you choose the best investment option that fulfills your investment objective, while considering the amount of volatility you’re willing to bear.

A financial adviser or financial advisor is a professional who renders financial services to individuals, businesses and governments. This can involve investment advice, which may include pension planning, and/or advice on life insurance and other insurances such as income protection insurance, critical illness insurance etc., and/or advice on mortgages. Ideally, the financial adviser helps the client maintain the desired balance of investment income, capital gains, and acceptable level of risk by using proper asset allocation. Financial advisers use stock, bonds, mutual funds, real estate investment trusts (REITs), options, futures, notes, and insurance products to meet the needs of their clients. Many financial advisers receive a commission payment for the various financial products that they broker, although "fee-based" planning is becoming increasingly popular in the financial services industry.

A further distinction should be made between "fee-based" and "fee-only" advisers. Fee-based advisers often charge asset based fees but may also collect commissions. Fee-only advisers do not collect commissions or referral fees paid by other product or service providers. Some investment advisors only charge a fee based on the assets managed for the client. Typically they charge about 1.0 to 1.5% per year to make the investment decisions for the client. They do not collect commissions.