We all earn money from our jobs. Or, if we’re lucky, we inherit it. Either way, that money loses value as it stands with every passing moment. This is known as inflation. It’s possible to turn your earnings into investments by allocating a portion of your income to something that’s expected to gain value over time, such as mutual funds, well-rounded stock portfolios, or precious metals. These investments should both protect against inflation and generate a return for you. Let’s dig deeper into the idea and practice of investment management.
Appropriate Investment Decisions Differ From Person to Person
You don’t simply choose to invest in anything. Rather, you gauge how much risk and potential reward are associated with such assets. From there, you determine if that risk-to-reward profile fits your particular goals and plans. For example, people who don’t earn a lot of money might not be willing to take on much risk because building their wealth back up could take decades.
This Strategy Spreads Risk by Stretching Out the Acquisition Process
Dollar-cost averaging refers to the investment management strategy in which you routinely deposit small amounts of money into investments you’re interested in as a means of generating risk. These gradual, controlled buy-in amounts take place no matter the investment’s current dollar valuation.
Don’t Actively Manage Your Portfolio
Over time, financial market research has shown that investors who actively manage their portfolios are more likely to bring in less return than their passive counterparts, those investors who tend not to mess with their portfolios, even during market downturns or upswings.
Westwood Holdings Group, Inc., is home to our very own world-class investment management program, which is widely regarded as one of the best on the U.S. financial services market. Want to see what else we can help you with?
