Guide to Investment Management in San Antonio, TX
Is it time to attract more financial abundance into your life? If you’ve been wondering when to seek an investment manager for financial guidance in Texas, it becomes relevant when you have enough funds to invest and build a diversified portfolio. This will differ from your family and friends, so how you go about finding proper investment support should be relative to your financial situation.
Let’s say you own a few shares of an individual stock and a long-term asset or have a relatively small amount of investment vehicles such as mutual funds and ETFs (exchange-traded funds). You can get a second opinion, as many DIYers wonder if their investment strategy is correct.
If you are ready to build and diversify your assets, you should start working with an investment manager for portfolio management.
While there are numerous resources about investment markets and specific investments online, many investors prefer to work with a financial advisor in San Antonio who aligns with their faith.
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Investment management refers to the decisions and actions taken to allocate an investor’s portfolio. When used for long-term wealth creation purposes, it typically involves building a diversified portfolio of assets. Asset classes commonly found in such portfolios include stocks, bonds, real estate, and commodities.
Investment management aims to build and oversee a portfolio of assets designed to help you achieve your financial objectives. This requires ongoing monitoring of your investment portfolio allocation to make any adjustments needed to keep you on track toward meeting your goals.
Financial planning and advisory services usually include investment management services offered by financial professionals.
There are many reasons to consider working with an investment manager, including:
- Time: Modern investment markets can be highly volatile, requiring constant monitoring to ensure that investment conditions align with your investment assumptions. A professional investment manager has the time to monitor the markets daily, which most investors lack.
- Expertise: The significant number of investment options available today comes with a price—it can be hard to know which is best for you in any given situation. Many investors may feel they lack the knowledge to manage their investments on an ongoing basis. Reading up on all the latest investment news and mastering the principles of investment management are tasks that many investors prefer to delegate to a financial professional.
- Experience: Even investors with significant investment and financial market expertise may not necessarily be interested in managing their own investments. This is often due to a lack of experience; it’s one thing to read about the markets and another to make investment allocation decisions regularly. If this applies to you, work collaboratively with your investment manager, offering your input while allowing the manager to do the asset allocation.
Comprehensive planning: Investors looking to receive a variety of financial planning services in addition to investment management may prefer the efficiency of working with an advisor who offers all of these services. Such services can include retirement planning, budgeting, insurance planning, debt management, etc.
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When looking for investment management services, it’s essential to understand exactly what a San Antonio financial advisor can offer you. As described, investment management is the process of making decisions about how to allocate an investor’s assets. It includes analyzing your current financial situation and future goals to create a plan that will meet your needs.
Investment managers use a variety of strategies to help their clients achieve their goals. They also work with other professionals, such as accountants and lawyers, to ensure all aspects of the investment plan are in order. Finally, they regularly monitor the investments and make changes as needed to keep them on track.
When searching for an investment manager in the San Antonio area, verify that they can perform all of these functions. Some financial advisors may focus on helping investors make plans for their financial future without providing investment management services to help their clients implement the strategies outlined in their plan.
Whether your focus is achieving long-term growth or current income on your investments, or something in between, it’s essential to look for an investment manager who is comfortable with the broad range of investment assets available today to build a diversified portfolio.
A manager who focuses strictly on, for example, speculative stocks or a single asset class such as real estate may work for investors who don’t mind an undiversified portfolio. However, building a diversified portfolio balanced between various asset classes and individual securities is generally the preferred approach for investors interested in creating wealth over the long term.
Thus, it’s crucial to find an advisor who can offer the investment management approach best suited to your investment objectives and financial situation.
Modern investment markets simplify the diversification of your assets broadly across different asset classes. In addition to longstanding classes such as stocks and bonds, investors can buy mutual funds, ETFs, and other less liquid investment vehicles, like real estate, commodities, and even cryptocurrencies.
Some commonly traded investment vehicles include:
- Stocks (equities): Individual stocks represent an ownership interest in a publicly-traded company.
- Bonds: A bond is an obligation to repay a loan taken out by a corporation or government entity, typically in the form of periodic payments until the balance owed is paid at the bond’s maturity date.
- Mutual funds: These investments offer diversification by allowing investors to purchase shares that give them prorated ownership in the fund’s overall portfolio, including hundreds of different stocks and bonds.
- ETFs: Exchange-traded funds are typically linked to an index such as the S&P 500 or NASDAQ. Unlike mutual funds, which can generally only be bought at the close of trading, they can be traded throughout the day like stocks. ETFs typically take a passive approach to investing, seeking to match as closely as possible rather than outperform the results generated by the index being tracked.
REITs: Real estate investment trusts offer investors the opportunity to invest in a security that provides interest payments based on the income generated by the properties held within the rate. REIT shares will go up or down in value based upon the interest payments they support and perceptions of the increasing or decreasing value of the property held by the REIT.
When looking for an investment manager, the first step should be to ensure that the advisor has the proper experience and training. In this regard, many investors prefer to work with advisors with the CFP® (CERTIFIED FINANCIAL PLANNER™) designation, which requires extensive testing and ongoing training to verify that the advisor understands all aspects of financial planning, including investment management.
Selecting an investment manager involves more than simply verifying that the manager has the proper licenses and training to offer the requisite services. At a macro level, it is vital that their approach to investment management makes sense to you and coincides with your risk tolerance and investment objectives.
Many managers offer specialized services designed to appeal to investors interested in a specific asset class or type of investment strategy (quantitative trading, international, speculative stock trading, etc.). But for investors taking a goals-based or values-based approach to investing, it’s generally better to find a manager who can work with a variety of different approaches.
For instance, if you are investing for retirement with many years to go, you are most likely to be interested in seeking to grow your savings. On the other hand, if you are just a few years from or already in retirement, you are not likely to want to invest as aggressively. With less time to make up for any market downturns, investors in this position typically focus on adding at least some conservative investments, like bonds or income real estate, to their portfolios.
An investment manager providing you with management services that fit your investment circumstances and risk profile should not operate with a one-size-fits-all approach.
In terms of financial planning, many investors have read about the Dave Ramsey principles of paying off debt and then incrementally building up your wealth over time. If this approach appeals to you, it makes sense to ask a prospective financial advisor if they understand Ramsey’s methods and if they are willing to help you apply them while working with you.
Modern investment markets are both highly complex and prone to significant volatility. As a result, there are several benefits to working with an experienced Texas financial advisor with the training and expertise to manage your money across various market conditions. These include:
- Selecting realistic investment objectives: An investment manager can provide you with a detailed analysis of the risks and rewards of various investment approaches. Many of them also offer access to sophisticated financial modeling software which can calculate the percent likelihood a given portfolio will achieve its objectives based on the historical performance of similar portfolios. These projections may run hundreds or even thousands of simulations to generate a success probability percentage, known as a Monte Carlo simulation.
Suppose your percentage is below your comfort zone. In that case, you can work with the manager to make changes to increase it by adjusting your investment strategy to aim for higher returns, increasing the amount you invest or reducing your ultimate savings goal.
- Building a portfolio: Selecting holdings for an investment portfolio requires significant knowledge of investment theory and specific securities, whether individual or pooled, such as mutual funds and ETFs. An investment manager can help you select the asset allocation percentages between classes that best fits your investment approach and risk tolerance and the individual securities within each class.
- Investment theory knowledge: Achieving optimal investment results typically requires adhering to a strategy designed to guide an investor’s selection of specific portfolio holdings. An investment manager can utilize their knowledge of investment theory to help you find an approach that fits your financial situation.
For instance, one commonly used investment approach, Modern Portfolio Theory (MPT), focuses on optimizing the potential return for a given amount of risk. This approach can be used within the context of emphasizing growth while an investor is younger and can take on more risk while investing more conservatively over time.
- Monitoring your portfolio and market conditions: Today’s financial markets can be tumultuous, meaning that your initial investment assumptions may need to change over time. An investment manager can keep an eye on market conditions for you and help adjust your portfolio allocation as required.
Comprehensive financial planning: Some investment managers also offer financial planning services that enable you to view your investment portfolio within your overall financial goals. This type of planning can help you achieve your goals by making sure that the impact of each goal is considered within the context of your financial plan as a whole.
The first step is to have a good idea of what you want to achieve. Your investment goals will drive your investment planning. A financial advisor can typically help with the goal-setting process and managing your assets. In doing so, they must ask questions such as:
- What are your major financial goals?
- How much do you have available to invest in them, initially and overtime?
- What is your risk tolerance?
- What are the time horizons associated with your goals, including your desired retirement timeline?
These questions can help you establish what you hope to accomplish and evaluate your available assets for investment. Whether you plan to invest over a period or in a lump sum, it’s crucial to have a good handle on this number to set realistic goals. Work with an advisor who has access to sophisticated financial planning software. This can help demonstrate how different investment results would affect your ability to reach your goals.
After establishing your goals and how much funds you have available to fund them, you are ready to start the investment selection process. Here, too, an investment manager can provide guidance based on their experience and expertise, helping select your initial portfolio allocation and adjusting it as needed on an ongoing basis.
PAX Financial Group, LLC is a San Antonio, Texas investment management firm that provides comprehensive advisory services designed to offer our clients assistance at every step of the investment process. From setting goals to building and managing an investment portfolio created to reach those goals, we can help you sort through financial complexities to live the life you want.
Contact us now for a complimentary, no obligation consultation to learn more about our fee-only financial advisor services. Start planning tomorrow, today!
This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate.
Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.
This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested directly. All economic and performance data is historical and not indicative of future results.