Why would you have your assets managed?

You want your money to work for you. However, saving yields nothing and self-investing is difficult and time-consuming. If you do want to put your wealth into motion, but don't have the inclination or time to invest yourself, asset management is a good option. What asset management is, what the difference is between asset management and self-investing, and what the advantages of asset management are, you can read in this article.

What is Asset Management?

An asset manager invests your wealth with the aim of achieving a positive return. The asset manager can be an individual or a company. In the past, you could only have your assets managed with a high deposit, often from €100,000. Nowadays, that is no longer the case. With some providers, you can start from as little as €50.

Self-Investing v.s. Asset Management

If you want to delve into different exchanges, market history, shares, and other financial instruments, self-investing suits you. You must also regularly take the time to trade and track your investments.

An advantage of self-investing is that you choose your own investments. You put together your portfolio with a mix of investments that suit your financial situation and investment goals. Think, for example, of different shares, ETFs, bonds, and other financial instruments.

However, self-investing also carries risks. In practice, it even rarely seems successful. Research shows that the average investor barely achieves a positive return in the long term. Investment experts are often in agreement on one thing: you can only successfully invest yourself if you have sufficient knowledge and time. In addition, it is important not to invest based on emotion. And that is precisely a pitfall for most DIY investors.

Asset management is suitable for people who want to invest their money, but don't have the inclination or time to research it themselves. If you have your assets managed, you often have to give a small percentage to the asset manager. These costs are called management fees. But, often the achieved return yields (much) more than the costs incurred. The nice thing about asset management is that you don't lose any time yourself. This way, your money works for you without you having to do anything.

‍Four things an asset manager does for you

Below you can read the four things a (good) asset manager does for you when you have your money managed.

Diversification

Diversification of your investment portfolio is crucial for success. Diversification is the spreading of your investments across different financial instruments, countries, regions, and sectors. If you invest yourself, you have to choose which mix of investments suits the risk you want to take. If you hire an asset manager, they do that for you.

Rebalancing

The value of your portfolio changes regularly. For example, the shares in your portfolio may suddenly be worth more than your bonds. As a result, you take a much greater risk than you had intended beforehand. That is why rebalancing is so important. When you rebalance, you bring your portfolio back into balance by trading investments so that your mix once again matches your preferences. An asset manager does this for you based on your financial situation and ambitions.

Risk Reduction

Do you have a specific investment goal? Then, the closer you get to this goal, the safer you can invest, becoming more certain of your target amount over time. This is called risk reduction. For example, you can gradually replace the number of shares you hold with bonds. Shares generally have a higher risk profile than bonds. In theory, your portfolio thus becomes increasingly safer. Risk reduction is a time-consuming process that an asset manager takes off your hands.

Plan Advice

Some asset managers give you personal plan advice. They look at your plan and try to achieve your investment goal even more efficiently or quickly. Or, if the economy changes, they review the possibilities with you to adjust your plan so that it continues to align with your wishes and goals.  

Conclusion

The conclusion is simple: do you have the ambition to delve into financial markets and invest time in keeping an eye on the market? Then self-investing is a good challenge.

Would you prefer your money to be well-invested without having to put time and effort into it? Then you had better look for an asset manager. Have your assets managed by Vive and:

• Get an investment strategy that perfectly suits you

• Have this investment strategy professionally executed for you

• Always remain in control of all your investments, without having to do anything actively yourself

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