Investment Management | FAQs
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The sooner you begin, the more time you have on your side, thus minimizing risk. This is why proper cash flow management is so important; it ensures that clients save at the optimal rate. On the investment side, the savings rate holds more significance than the rate of return. Clients who are not saving an adequate amount of money often end up pursuing higher-risk-return assets. However, this pursuit of higher-risk returns leads to larger fluctuations and increased volatility in their portfolios. The higher the volatility, the more likely people are to make poor decisions due to their inability to endure the ups and downs.
If a client is saving the appropriate amount of money, they do not need to take on excessive risk.
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Compounding refers to the process where the value of an investment grows exponentially because the earnings on that investment, both capital gains and interest, earn interest as time passes. In other words, it involves earning returns not just on the original investment amount but also on the accumulated interest or returns from previous periods.
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We refer to these as Robo-Advisors. People use them because they believe they can manage their investments independently.
While a robo-advisor can be beneficial in guiding users along the way, there is one crucial aspect it cannot address. It cannot create a comprehensive plan encompassing accumulation, distribution strategy, protection strategy, and legacy strategy. It cannot guide you through all these aspects, nor can it offer support during turbulent market conditions. Not to mention, the standardized one-size-fits-all algorithm approach.
Robo-advisors often rely on the assumption that setting and forgetting a plan will work out perfectly, assuming no human emotional behavior, disruptions, or unexpected events. Unfortunately, reality doesn't always match this ideal scenario. Without someone on your side of the table to navigate every aspect of this journey, Robo-Advisors are more likely to make incorrect decisions.
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Stocks represent ownership in a company, while bonds are debt securities issued by companies or governments. Stocks offer ownership and potential for capital appreciation, while bonds provide regular interest payments and return of principal.
Investment management is essentially about skillfully overseeing investment funds, with a key focus on understanding behavioral finance. The heart of the matter lies in steering individuals toward thoughtful decision-making based on reason rather than succumbing to emotional impulses. We have access to some of the best institutional money managers in the industry. We can offer institutional-level money management services to our retail clients at a very low entry point. Our distinct value proposition revolves around safeguarding our client's commitment to their financial strategies, mitigating the influence of natural emotions that may otherwise prompt counterproductive actions.
FOCUS AREAS
✔ Wealth Building Account
✔ Learn more about Park Avenue Securities.
✔ Real Estate Investing
✔ Environmental, Social, and Governance (ESG) Considerations
✔ Tax Strategy
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