Investment Management

What you need to know

There are numerous factors to take into account when devising your unique investment approach, ranging from your tolerance for risk to your anticipated time horizon. We’re here to guide you, providing clarity and support along the way.

You likely already have a strategy for investing, whether you realize it or not. For instance, it’s common to hear something like this from a client when discussing investments – “I have the majority of my funds in my 401(k), but also utilize some for trading or crypto.” This indicates that allocation is happening. Whether fully thought out or not, there is still a strategy being utilized, but not optimized. 

But creating an intentional strategy that is suited to you and your needs is essential. If you have various financial goals like expanding your wealth over time, ensuring a secure retirement, and leaving a legacy for future generations, a strategy is necessary. 

And this strategy should serve three purposes:

  1. Facilitate Wealth Accumulation: Most investments tend to appreciate in value over time, whether they are stocks, bonds, real estate, or other assets.
  2. Generate Supplementary Income: Your investment strategy can yield additional income through interest on savings, stock dividends, or revenue from property investments. This is particularly significant during retirement when regular income streams may diminish.
  3. Mitigate Risk: Diversifying your investments across various asset classes and financial sectors can help minimize risk exposure and safeguard your capital.

Key Considerations for Investment Strategy

When contemplating your investment strategy, several factors should be considered:

  • Financial Objectives: Clearly define your financial goals, whether they involve saving for retirement, purchasing a home, or other endeavors. Understanding these objectives is crucial for developing an investment plan.
  • Time Horizon: Assess the time you have to achieve your goals, as it influences your investment approach. Longer time frames allow for greater risk-taking, while shorter ones may necessitate a more conservative approach.
  • Risk Tolerance: Determine your comfort level with investment risk, as it varies among individuals. Risk tolerance is influenced by factors such as time horizon and personal preferences.
  • Asset Allocation: Allocate your investments across different asset classes—such as stocks, bonds, real estate, and cash—to diversify your portfolio and manage risk effectively.

Investment Management Types

Your approach to managing assets and investments can vary depending on your level of engagement and market knowledge:

  • Active Management: Involves selecting and managing investments with the aim of outperforming the market. This strategy is suited for individuals with extensive knowledge of investing and market dynamics.
  • Passive Management: Common among many investors, this approach entails investing in index funds or ETFs to mirror market performance. It offers a lower-risk investment avenue with the potential for steady growth.
  • Hybrid Approach: Many investors adopt a combination of active and passive management strategies, allocating assets accordingly across different investment vehicles.

Investment Opportunity Types

Alternative investment opportunities reflect individual preferences and beliefs. In constructing your unique approach, there’s a vast array of investment types to consider.

  • Stocks: These represent ownership shares in a company, offering the potential for high returns over the long term, but also subject to volatility.
  • Mutual Funds: These are professionally managed groups of securities, providing diversification and risk reduction for investors.
  • Exchange-Traded funds (ETFs): Offering greater liquidity, ETFs are similar to mutual funds, but traded on exchanges.
  • Bonds: Purchasing bonds entails lending money to governments or corporations in exchange for principal repayment and interest, typically offering lower returns than stocks, but with lower risk.

Beyond these conventional options, alternative investments include:

  • Real Estate: An investment option suitable for those seeking stable income and appreciation, albeit with potential liquidity and management challenges.
  • Private Equity or Venture Capital: Investments in privately-held or early-stage companies with growth potential, they often require accredited investor status due to evaluation complexities.
  • Cryptocurrencies: Digital tokens secured by cryptography, known for high volatility and speculation, but with potential for significant returns.

Phew. That Was a Lot to Process!

Understanding all of this can feel daunting. It’s natural to feel overwhelmed by the complexity, especially when juggling multiple goals and investment types on various timelines. This is why many individuals, as they amass wealth, opt to collaborate with a financial advisor to help them navigate through the complexity.

At Rely Wealth we make every effort to be that trusted resource for you – an advisor on which you can rely – for sound advice, clear guidance, and consistent support.

DISCLOSURE: Investment advisory services offered through Rely Wealth Partners, LLC, a DBA of tru Independence Asset Management, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission. This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.

We work with highly motivated individuals and families who want to be financially complete and value clarity.

Daniel Mauser — Founder and Managing Partner