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Investment Management in Canton Ohio

Investment Management Canton OH
Chapter 1

What is investment management?

Investment Management is the professional asset management of a portfolio consisting of various securities including shareholdings, bonds, and other assets such as real estate, energy, utilities and others, in order to meet specified investment goals for the benefit of the client.

Investment managers or asset managers are an important part of your investment portfolio. They can help you determine the best investments for your financial situation. Asset managers generally earn fees based on how many assets are under management.

Investment management is different from wealth management, which is discussed in more detail in Chapter 6, but suffice it to say that in order to align your investment objectives in the context of your unique comprehensive plan, an investment portfolio requires the skills of an experienced financial planner and investment manager.

In a sentence, investment management is done by someone who manages a portfolio of assets, while wealth management is about planning for long-term emotional and financial wellness.

What is an investment advisor?

An investment advisor is any person who engages in the business of advising others for compensation, either directly or through publications. An investment advisor is considered a practitioner if he or she advises others regarding the value of securities for investing, purchasing or selling, as well as issuing reports and analyses on securities.  

The more educated you are about your investments, the more your investments can achieve specific goals because your investment advisor can create a plan that’s based on your risk tolerance and financial needs.

An investment advisor provides a professional service to manage funds so that they grow over time while taking into account factors like inflation and taxes.

These goals can be achieved through asset allocation, diversification, hedging strategies, or other means. Investment managers not only need to have expertise in finance and investments but also in psychology because they help people understand what their risk tolerance is when they react emotionally to market fluctuations. As such, they must be able to make decisions quickly and focus on long term growth rather than short-term wins.

 

Chapter 2

Asset Allocation

Once you’ve made an investment plan, you need to consider asset allocation, which is how much of your portfolio should be allocated towards stocks, bonds, cash equivalents, and other financial instruments. There are many ways to determine this balance, but each investment planner has their own method for doing so.

One method is to reduce risk by allocating the appropriate proportion of the portfolio into different types of financial instruments such as stocks, bonds, treasury bills, and other financial assets (such as real estate, commodities, or any financial asset that is not represented in the other three financial instruments). The investment planner uses your financial plan to determine the appropriate proportion of the portfolio to allocate towards each financial instrument.

Using this method can be effective because it reduces risk by spreading out investments across different financial instruments. By diversifying your investments, you are essentially reducing unique risk—the risk of putting all of your eggs into one financial basket or picking just a few winners and losers. Instead, investing in various financial assets helps ensure that even if some of your investments are not doing well financially, others might be bringing gains.

Investment planners use statistics to come up with an acceptable level of unique risk based on your personal goals and tolerance for financial risk. This type of financial planning optimization is based on dynamic financial analysis, financial projections, financial asset modeling, and probability theory or statistical analysis.

Asset Location

After an investor has decided on their asset allocation they need to consider where to place those investments. Investment managers call the different types of financial instruments “asset classes” because they can include stock mutual funds (equities), bond mutual funds, money market mutual funds, real estate investment trusts, and others.

Asset location simply means finding the best location for each asset class within your portfolio—for example placing stocks in a tax-deferred account such as an IRA or 401(k) to defer capital gains tax. More on asset classes in Chapter 3.

An investment planner uses financial projections similar to the ones used in financial planning optimization, by creating financial models for each type of financial asset held within your portfolio. They will then compare different scenarios with the same returns but different asset allocations. By choosing the scenario that has the best after-tax return, this is one method of deciding where to place financial investments in your portfolio for maximum benefit given your financial goals.

Liquidation Value

Liquidation value refers to how much money an investment is worth when it is sold. Your investment planner will calculate this figure for you when making financial projections or determining financial goals.

Liquidation values can help planners and investors when determining financial goals and financial projections by giving them an upper limit on financial targets. For example, if you plan to retire in five years and want your financial portfolio to be worth $2 million dollars by the time you leave the workforce, then your advisors might estimate that your financial assets will need to increase in value each year by 7-10%. This ensures that your financial projections meet your financial goals at the least cost—if they don’t then you need to adjust your financial goals or financial investments until they do.

Risk Tolerance

Financial risk tolerance is a term used by investment planners to determine how much financial risk an investor can endure. When advisors are making financial projections, financial models, or financial asset allocation decisions, they typically use the terms “risk tolerant” or “risk adverse.” Risk tolerance refers to an investor’s willingness to take on financial risk in return for higher expected returns while risk adverse means that an investor doesn’t want any financial risk at all—in other words they want guaranteed investment returns, which typically grow at a slower rate than riskier investments.

When factoring for risk tolerance, your asset manager or wealth manager should ask you questions about your income, current savings rate, investments already owned, age, income growth rate, financial goals, financial planning priorities, financial planning concerns, financial future market returns, tax rates, investment time horizon, and current financial assets to determine your financial risk tolerance.

For example, if you have an investor who chooses asset preservation over the potential for a higher-than-average return, then your financial advisor would likely decide that you are not as financially risk tolerant as someone who may have an appetite for higher price volatility, because the former investor might feel too much fear about losing their investments during a bear market.

Chapter 3

Asset Classes

Investment managers use asset classes to create financial portfolios. They are the building blocks of financial planning; they represent different types of investments, such as stocks or bonds. Asset classes can be used in many ways: for example, some financial planners might want to include both stocks and bonds in a portfolio because having them together provides more stability than either does alone.

Some examples of different asset classes include:

  • Money market funds
  • Short term US bonds
  • Long term US bonds
  • High yield and international bonds 
  • Real estate
  • Precious metals
  • Stocks 
  • Commodities
  • Cash equivalents (holdings in financial instruments where the return on investment is not dependent on potential fluctuations in financial markets like certificates of deposit)
  • Complex financial transactions like options trading
  • Cryptocurrencies (like Bitcoin)

Investment managers and advisors will usually recommend financial plans designed specifically for their clients–not only because it allows them to be more competitive but also because some financial planners have access to investments through their networks. Because of this, financial planners can create customized financial asset mixes and may sometimes charge lower management fees than other financial advisory platforms (like mutual fund companies).

Chapter 4

The importance of regular investment portfolio reviews

An investment portfolio review by an investment advisor is one of the most important things you can do for your financial future. But it’s also one of the easiest to put off, and often many people don’t even know they need an investment portfolio review in the first place.

What Is an Investment Portfolio Review?

An investment portfolio review is the financial term for looking at the investments you already have, understanding their value and history, and determining how they can work toward your financial goals. It’s also called financial planning because it focuses on managing your current financial affairs in order to achieve financial goals. An investment portfolio review by a financial planner is one of the most important things you can do for your financial future, as it measures your progress toward your desired outcome.

Who Needs an Investment Portfolio Review?

Anyone who has investments needs an investment portfolio review. That means anyone with stocks, bonds, mutual funds, real estate—or anything else that involves money—needs this kind of review. The process not only looks at what you have, but what the financial planner recommends for your financial future.

How Does It Work?

The financial planner analyzes all of your investments and then looks at how they work together and whether they meet financial goals. This typically includes:

        Assessing financial goals and risk tolerance;

        Evaluating current financial affairs;

        Determining tax implications; and,

        Recommending changes or modifications to current investments.

As part of a regular investment portfolio review, an experienced advisor will look at your financial goals and consider other financial issues such as retirement, risk management, insurance needs and more. The financial planner will discuss each of those financial needs with you and present options for meeting your financial goals.

Chapter 5

How to find the right financial planner

A financial planner is a professional who helps you make financial decisions and manage your investments. Financial planners can be either independent or with an institution like a bank, insurance company, financial management company, brokerage house, credit union or other financial services firm.

The best financial planners offer personalized service that considers not only your current financial situation but also your future goals. They provide objective advice to help you understand the pros and cons of various investment strategies and products such as stocks, bonds and mutual funds. Some may even assist in estate planning for those who have accumulated significant assets over their lifetime.

When choosing a financial planner, it’s important to look at things like: experience; credentials; educational background; work history; areas of specialization (e.g., financial, tax); financial services offered; and total costs and fees charged.

A financial planner may be certified by a credentialing organization, such as the Certified Financial Planner Board of Standards Inc., which administers the first comprehensive financial planning certification program. This code of ethics is especially helpful when you are searching for an unbiased fiduciary financial planner on the Internet.

Professional organizations also may offer financial planning designations that indicate familiarity with specialized areas of personal financial planning. These include CERTIFIED FINANCIAL PLANNER™ practitioner (CFP®) CFA (Chartered Financial Analyst) or another designation specific to your interests or industry, such as CLU (Chartered Life Underwriter).

A new designation just beginning to emerge is the FPC (Fellow of the Personal financial planning division): a designation that will be awarded to financial planners who have completed a minimum of two years of specialized financial planning training and five years’ experience working in financial services. This credentialing will require financial planners to take additional courses in financial, tax, retirement and estate planning.

In the meantime, when looking for a financial planner you should ask about their professional designations, educational background and occupational experiences.

Chapter 6

Wealth management planners

Wealth management planners provide the highest level of financial planning services.  This generally includes comprehensive investment management alongside financial planning advice, tax guidance, estate planning and even legal assistance. 

McGervey Wealth Management can help you with your financial goals by combining their expertise and experience with practical financial solutions. They love to advise people who want growth in their financial future.

They have experience in creating comprehensive strategies to ensure that your wealth is being leveraged to move your goals closer. They explore and execute investment strategies that will optimize your ability to meet your goals and live the life you desire. They start by crystallizing their client’s goals in order to begin with the end in mind.

Their business is built around client-first ethos. At their firm, they are as committed to exhibiting high levels of professionalism as they are to building relationships with clients built on trust and mutual respect. That’s why they offer a transparent fee-only compensation structure so that their clients never need to be concerned about a conflict of interest.

McGervey Wealth Management has an experienced team that helps clients manage their investment portfolios, plan for retirement, strategize taxes, or execute any other initiatives in pursuit of optimum financial health and minimal financial stress.

Their team brings years of financial services experience to each client relationship, and we’re committed to providing personalized service that meets the needs of every stage in life. Let them show you how they’ve helped other residents in Ohio like you reach their financial goals.

Contact them today to begin a relationship with a team of knowledgeable, trustworthy professionals who put their clients first.