Should you hire someone to manage your shares?
Hiring a professional to manage your shares depends on your profession. Does your profession allow you extra time to manage your investments? As we know that the share market is full of uncertainties and price volatilities, it is a must to keep an eye on the same. It also depends on the amount you are investing.
Professionals understand the client's profile and risk-taking capabilities. With this data, a portfolio is designed and is diversified into different instruments like stocks, commodities, bonds, mutual funds, SIPs, forex, and IPOs. They also indulge in hedging through the derivatives market. After building the portfolio, the professionals also manage the same.
Let us take a look at the merits & demerits of having a professional manage your shares.
- Professionals who cannot take out time for investment activities can benefit if a professional manages their funds.
- People who are not aware of trading jargon and are not aware of how to invest can benefit.
- The risk is potentially less when professionals manage our fund.
- Organized portfolio building.
- A senior citizen can benefit from hiring a professional to manage their shares.
- Rookie investors can hire a professional as they would not be familiar with the events and things that affect the share market.
- Professional can provide the right advice on what and when to invest.
- People may not be open to sharing sensitive data with someone else.
- Trust plays a significant role.
- Having a professional manage your shares would be an additional cost.
- There is a risk of mismanagement.
- Not recommended for people with small investments.
Who can manage your shares?
Fund managers, PMS (portfolio management system), wealth advisors, and also some banks provide advisory on share management. However, these entities mostly manage the portfolio of HNIs (high net-worth individuals).
It is not necessary to have someone to manage your investments even if you not aware of the trading techniques. You can still make investments in the stock market just by buying some services, like mutual funds.
Mutual funds are a pool of funds invested in diversified stocks. Based on your risk-taking capabilities, you can choose the type of mutual fund you wish to invest in, i.e., small-cap, medium-cap, or large-cap. The small-cap is riskier than the medium-cap, while large-caps are the least risky.
If you are not comfortable investing a lumpsum in a mutual fund, another way to invest can be through an SIP, i.e. Systematic Investment Plan. Here, the investments are made in parts, much like EMIs. This way, even if you are busy, you can still invest and earn profits.
In conclusion, it is more convenient to trade in share market when you have someone to manage your portfolio. However, with a little self-teaching and some experience, you can be your portfolio manager.
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