Fund Managers Are Essential…
Fund managers are an essential part of your wealth.
You may not notice it, but they’re in the background, responsible for essential activities like:
- Execution of fund strategies
- Managing trading activity
- Fund diversification
- Portfolio rebalancing
They keep a close watch on every movement, every fluctuation, every wiggle in the market, working hand in hand with other analysts for background and research, while selecting key financial avenues to invest in.
Think of them like a surgeon – the “go to guy.”
Just as a surgeon needs necessary equipment, reports, and analysis for a successful operation, a fund manager needs the same things to maintain the health of your portfolio. Also, just as a surgeon needs a team of nurses, support staff, and anesthesiologists, for example, a fund manager is assisted by other fund managers and an operations team.
The fund manager is also key to:
Your standard allocations in a fund include Bonds, Stocks, Real estates, and Commodities. Any successful investment relies on the strength of asset allocations and individual holdings in an effort to outperform benchmarks.
According to the Securities and Exchange Commission (SEC)…
“By including asset categories with investment returns that move up and down under different market conditions within a portfolio, an investor can protect against significant losses. Historically, the returns of the three major asset categories have not moved up and down at the same time. By investing in more than one asset category, you’ll reduce the risk that you’ll lose money and your portfolio’s overall investment returns will have a smoother ride. If one asset category’s investment return falls, you’ll be in a position to counteract your losses in that asset category with better investment returns in another asset category.”
Hand in hand with asset allocation, diversification is key. This allows you to invest across multiple asset classes in an effort to reduce broad portfolio risks, while maintaining a desired potential return. It’s essential for success.
Diversification is a strategy that can be neatly summed up by the timeless adage “Don’t put all your eggs in one basket.” The strategy involves spreading your money among various investments in the hope that if one investment loses money, the other investments will more than make up for those losses, as also noted by the SEC.
In short, a fund manager – again, just like a surgeon – will keep you from bleeding out.
Also, you wouldn’t just go with any surgeon, right?
You’d want key information on that person. And you really want to know if they’re skilled, with necessary education. After all, the fund manager plays a key role in the growth of your funds. So, you want to make sure they have industry experience, track records, and achievements.
We should also touch base on active and passive fund managers.
Active fund managers make all the decisions, and work to beat a fund’s benchmark index. They’ll spend a good deal of time handpicking the right stocks, bonds, and securities to help grow your wealth, and the health of the fund. Along the way, with active fund managers overseeing the funds from scratch, they often charge a higher management fee. Meanwhile, your passive fund manager simply focuses on making small adjustments.
- A fund manager is like a surgeon. Without them, surgery can’t happen. You’re stuck with whatever you have going on.
- The fund manager ensures the fund performs well, if not better than the benchmark
- There are mainly two kinds of fund managers — active and passive. While active fund managers try to beat the benchmark index, passive fund managers focus on readjustments to get to par.
So yes, a fund manager is essential. That is, if you’re serious about your wealth.
Normally, individual traders don’t have a lot of personal access to fund managers. But thanks to my industry connections, that doesn’t have to be the case for you.
One of the exclusive benefits we give to the All Star Funds VIP subscribers is a monthly conversation with some of the brightest stars on Wall Street — managers whose funds routinely beat the market.
This week Joe Terranova joined Adam Mesh for a sit down interview to talk about everything from Joe’s background to how he became one of the faces for CNBC’s most popular shows, Halftime. Joe is also well known for being the Senior Managing Director for Virtus Investment Partners, an asset management firm with $175 billion under management, and where he also has his own ticker symbol.
You may have missed the live webinar, but don’t worry!
You can watch the recording, as well as sit in on all the future interviews with Wall Street’s best, when you sign up for All Star Funds VIP package. You can upgrade to the VIP section of All Star Funds here!
See you next time…