CFI.co Blog

According to industry watchers, the net asset value of mutual funds across the United States stood at $17.71 trillion as of 2018.

Many individuals are looking to put their wealth into securities and other assets. However, due to the small size of their checks, investing in securities carries high costs.

Mutual funds come in to help aggregate individual investors. A principal mutual funds advantage is that you enjoy more convenience in investing. Here are seven reasons why a mutual fund is right for you.

What Is a Mutual Fund?

A mutual fund is an investment firm that brings together money from various investors to buy large-sized assets.

The assets that mutual funds typically put their money into are stocks, bonds, and other securities. The total sum of all the holdings a mutual fund invests in is called a portfolio and is managed by paid professionals.

When you give a mutual fund your money, you’re effectively buying its shares to become a part-owner earning from the income it generates.

How Mutual Funds Work

Regardless of the kind of fund you invest in, its performance (and revenue) will depend on its kind of management.

A passive mutual fund will invest according to a set strategy whose goal is to match a particular market index. As a result, these kinds of mutual funds don’t require you to have deep investment skills.

Passive funds charge lower management fees since they don’t call for as much hands-on management.

It’s worth noting that two popular types of passive mutual funds today are exchange-traded funds (ETFs) and index funds.

Actively traded funds, on the other hand, work to outperform the market indices. Consequently, they hold the potential to earn you more. They also carry a higher risk than passively traded funds, which you must put into consideration.

How Do You Make Money With a Mutual Fund?

Once a mutual fund makes a profit, there are three ways that you, as an investor, can earn a return – dividends, net asset value (NAV), or capital gains.

Dividends come from when the fund receives interest on the share it holds. Each investor in the fund gets a proportional amount, and you can choose to reinvest that in the fund.

When a mutual fund sells a security at a higher price than it bought it, it makes a capital gain. You’ll receive your portion of this income annually from the fund.

NAV is where the security you own increases in value due to the fund’s astute management. While you don’t immediately receive funds from the growing NAV, it means you stand to make more money should you sell your stake in the fund.

Mutual Funds Advantage

Mutual funds hold distinctive advantages as tools to help you grow your wealth. These benefits include:

1. Your Investment Is Diversified

Any financial consultant will tell you to take a diversified approach when it comes to wealth management. Diversification is whereby you mix the resources and investments in your portfolio to reduce the risk you face.

A mutual fund helps you to access various investments that face varying risks that can offset one another.

As a result, if a crisis or loss hits one sector, you won’t face as significant a loss as investments in other sectors can help offset the outflows.

2. Economies of Scale

One of the most compelling features of a mutual fund is the scale at which it operates. When many investors come together and pool their funds, they can buy into more lucrative assets that would have been hard to purchase as individuals.

Additionally, because of the large size of mutual funds, individual investors pay less for the service.

3. There’s Professional Management

If you don’t like picking the stocks to buy due to a lack of time or in-depth knowledge, then a mutual fund is for you.

Each mutual fund employs professional managers who do the heavy lifting with the research, picking stocks, and managing the portfolio. Thus, you get to access a full-time investment manager to help you grow your holdings at a fraction of the cost.

4. Liquidity

When you’re considering an investment as an individual investor, you have to assess its liquidity. The easier it is to sell what you hold, the faster you can access your money when you need it.

You can buy and sell a mutual find relatively easily unlike say disposing of property you have invested in.

In case you need money urgently, you can sell your holding in the fund fast. Should you spy out an opportunity in a sector your fund invests in, you can quickly and easily take up a position to benefit.

5. There’s Variety

As an individual investor, a mutual fund opens up a variety of options to put your money in that you’d not access on your own.

For example, a manager can run a fund that employs several investment approaches. You can access value investing, macroeconomic investing, and other methods all in one package.

Some mutual funds (known as bear funds) are structured to make money from a falling market. Such funds can enable you to protect your downside in ways you couldn’t as an individual.

Through this variety, you get to access foreign and domestic deals that can attractively grow your portfolio.

6. Easy Access to Specialized Sectors

If you’re interested in securing a position in complex sectors as an individual investor, then a mutual fund is the best tool to use.

Mutual funds have built up a track record of tackling extremely complex investment areas in a logistically easier manner for you. With one, low ticket investment, you get to outsource all the hard work that goes into such investment selections.

7. Transparency in Investment

Where you put your hard-earned money to work for you must be secure, and mutual funds give you this advantage.

Every mutual fund is heavily regulated to ensure investors are treated fairly. Therefore, with a mutual fund, you can have peace of mind since there is greater visibility into where you invest your money.

Let Your Money Work for You

Securities are a great way to grow your wealth, but as an individual investor, it can be costly to invest in them. A mutual fund is a vehicle through which your small check can make consistent returns. Another significant mutual funds advantage is the convenience you have as professional managers handle things. Pull together with other small investors to gain access to consistent investment returns.

Capital Finance International (CFI.co) is your premier online resource for all things investment. Reach out to us today for news, commentary, and analysis that will shift your investment thinking.

Economics

Negative interest rates are coming, investors taking action: deVere CEO

ByCFI.co Blogger

Negative interest rates are coming and investors will now be looking to bolster their portfolios to ‘get ahead of the curve and build wealth’, says the CEO and founder of one of the world’s largest independent financial advisory organisations.

deVere Group’s Nigel Green is speaking out after rate options, which gauge monetary policy forecasts, implied on Monday a 23% likelihood that the key federal funds rate will drop below zero by the end of 2020, according to BofA Securities data.

It’s not just the U.S., the world’s largest economy, which is moving towards this scenario.

On Tuesday, the Deputy Governor of the Bank of England also suggested that the UK may be headed toward negative interest rates.

Mr Green comments: “A new global era of negative interest rates would have been unimaginable even a few months ago. But this has now changed due to the coronavirus.

“As central banks around the world grapple to control the economic impact, it can be reasonably expected that more and more of them will take a dramatic change of policy course and take rates to below zero – like their peers in Europe and Japan.”

He continues: “There is legitimate debate about the efficacy of negative interest rates on boosting economies.

“They could turn out to be a masterclass in the law of unintended consequences as they could be viewed by consumers and investors that the underlying economies are in a perilous position and, as a result, prompt a drop in consumer and investor demand.”

Whilst the debate on whether negative interest rates help the ‘real economy’ or not will continue, there is no doubt that they help boost financial asset prices.

“With this firmly in their minds, market-wise investors will know be looking to bolster their portfolios before the next round of cuts and the likely subsequent price increase. They are taking advantage of the lower entry points now before the next major rally,” notes Nigel Green.

He goes on to add: “In addition, those with savings in the bank are already getting no return thanks to the ultra-low interest rates. Negative rates will offer them more reason to increase their exposure to equities, for example.”

The deVere CEO concludes: “The question mark remains on whether cutting rates from their already low levels will solve the issues created by the coronavirus outbreak.

“I believe, due to the economic situation and the hints from central banks, that there are more rate cuts on their way as they know it’s not sustainable to just keep printing money.

“This ‘direction of travel’ will push up financial asset prices and, as such, many investors are now looking to get ahead of the curve and build wealth.”

Finance

Bitcoin halving highlights crypto is part of mainstream finance: deVere CEO

ByCFI.co Blogger

Bitcoin’s historic halving event on Monday underscores that the “long-term future of cryptocurrencies is secure”, says the CEO and founder of one of the world’s largest independent financial advisory organisations.

The comments from deVere Group’s Nigel Green come as the world’s supply of Bitcoin was forever slashed on Monday. The highly anticipated halving event, occurring only every four years, means that less and less Bitcoin – which is limited to 21 million units – will now been mined.

Monday’s was only the third ever halving. In 2012, the number of new Bitcoins issued every 10 minutes fell from 50 to 25. In 2016, it went down from 25 to 12.5. Now, in the 2020 halving, it will drop from 12.5 to 6.25.

The halving happened on block 630,000.

Nigel Green says: “The historic Bitcoin halving event has demonstrated in two ways that digital assets’ long-term future is secure.

“First, the price had been rising steadily ahead of the highly anticipated event – almost three-fold in the last three months – and then dropped back just before and after it took place.

“This shows that there has been increasing retail demand for Bitcoin as investors see and understand the growing influence and huge opportunities of digital currencies in an increasingly tech-driven world.

“With this in mind, large cryptocurrency investors, known as ‘whales’, accumulate crypto at much lower prices then start a sell-off to capitalise on this sustained growing demand.”

He continues: “Second, history teaches us that after this post-halving drop in price, there is a subsequent bull run.

“Previous Bitcoin halving events have prompted impressive price climbs. The 2016 halving triggered a 300% jump in the value of Bitcoin.

“There is no reason to believe this time the market will not respond with a longer-term upward trajectory.

“Indeed, the rally which is likely on its way could potentially be even more dramatic because there is more mass awareness than ever before of the long-term use of and need for digital currencies.”

The deVere CEO adds that in these unusual times, central banks have increased monetary supply and this will further drive prices of cryptocurrencies such as Bitcoin.

“Traditional currencies are devalued and inflation fears rise on the back of the mass printing of money, the likes of which we have recently seen in the U.S., where the nation’s central bank has added trillions of dollars to the money supply,” he says.

“Such measures will inevitably encourage even more investors to consider decentralised, non-sovereign digital currencies.”

Mr Green concludes: “Looking ahead beyond the halving event, cryptocurrencies are increasingly becoming regarded as the future of money due to the real-world issues they address and growing mass adoption.”

Economics

Are rallying stock markets out of step with economic reality?

ByCFI.co Blogger

Buoyant stock markets are not necessarily ignoring alarming economic data, rather they are reflecting the post-pandemic era, affirms the CEO of one of the world’s largest independent financial advisory organisations.

The observation from deVere Group chief executive and founder Nigel Green comes as official figures on Friday revealed that more than 20 million people in the U.S. lost their jobs in April and the unemployment rate more than trebled.

Mr Green comments: “The staggering U.S. unemployment numbers wipe out a decade’s worth of job gains. There’s been nothing like this since the Great Depression.

“Yet U.S. stock futures climbed higher as global markets rose on Friday. This is highly unusual.”

He continues: “There are two things happening simultaneously here.

“First, a weak first half of 2020 has already been priced-in.

“As have the risks of a potential second wave – but the concerns of this are being largely contained as it is not such a ‘bolt out of the blue’.

“It is extreme uncertainty, the likes of which we saw at the peak of the pandemic, that typically upsets markets.

“Whether they are correct in their assessment remains to be seen, but markets are looking towards the second half of the year. They appear to believe that there is likely to be a steady economic recovery as key advances are made in coronavirus treatments, as central banks continue to implement and further bolster historic stimulus packages, and as lockdown restrictions around the world are eased to revive activity.”

He goes on to add: “Second, and perhaps more importantly, stock markets are reflecting what is going on in the economy right now and what it’ll look like post-pandemic.

“A closer look at the markets reveals that, of course, not all stocks and sectors are rising equally. They are being driven up across the board by the ‘winners’ of this new era including tech, biotech, home entertainment and established online retailers, amongst others.

“We can assume that these, and other stock market ‘winners’, are showing us what the future economy looks like.”

The deVere CEO concludes: “The optimistic stock markets seem at odds with the grim economic data. They may be being overly confident, even complacent.

“But it could also be the case that they are giving us clear signals for the current and future shape of the economy, in which there are and will be distinct winners and losers.

“A good fund manager will help investors seek out the opportunities and mitigate potential risks as and when they are presented to generate and build their wealth.”

Finance

Demand for financial advice surges 24% as priorities shift in new era

ByCFI.co Blogger

As individuals, households and businesses readjust and look ahead to a new era and recovery, demand for financial advice is up by almost a quarter, reveals one of the world’s largest independent financial advisory organizations.

deVere Group, which operates in 100 countries worldwide, says the number of enquiries from new clients was up 24% in April, compared to the previous month.

Of the findings, Nigel Green, the founder and chief executive of deVere Group, observes: “Disruption and dislocation have hit entire economies and businesses of all sizes and in all sectors.

“This has had a very real and very immediate impact on the finances of individuals, households and businesses around the world.

“Suddenly, unexpectedly, many have realised that they didn’t have sufficient money behind them, they didn’t have contingency plans.

“This, as they know, could have consequences for the lifestyles and life opportunities of themselves and loved ones and, for those in business, for the long-term sustainability of their firm.

“With financial matters back in sharp focus, for many ‘I should have’ becomes ‘I need to have.’

“This most unusual situation has dramatically underscored that no-one really knows what is around the corner. Now more than ever people are seeking to be as financially prepared as they can for any eventuality.”

He continues: “The same thing happened following the 2008 financial crash. That too served as a wake-up call to many people to ensure that they become financially secure and there was a subsequent increase in demand for advice.

“Even then – when confidence in financial institutions, especially traditional banks, was at an all-time low – people understood that as the world evolves, your financial planning strategies might need to also.”

This, says Nigel Green, is driving the increasing demand. But in this tech-driven era, how do people want this advice delivered?

According to a poll carried out by deVere amongst existing and prospective clients, 52% said ‘face-to-face, 42% said they prefer videocall platforms like Zoom, and 6% answered ‘by telephone.’

“Given the circumstances and how much things have changed, I quite was surprised that the preferred option for the delivery of financial advice remains face-to-face.

“But video communication is only 10% behind, which is quite something as it is a new platform for most people.

“The survey underscores that increasingly people want bespoke financial advice combined with innovative technology.”

Mr Green goes on to add: “We can be in no doubt that the world has already fundamentally changed – and it will do so more and maybe at a faster pace.”

This was highlighted by the deVere poll which revealed that 72% of client respondents feel the world has changed permanently.

In addition, 80% said that in a similar way to after the 2008 crash, new companies will emerge and the same ones that were successful in the past were not guaranteed to succeed again.

“With these shifts impacting people’s finances, the majority of our new clients are seeking advice on savings plans, investments, foreign exchange, pensions and retirement planning and tax planning,” he notes.

The deVere CEO concludes: “2020 has been a year of change. For an increasing number, this includes a change in the way we prioritise, with long-term financial security for ourselves and our loved ones ever-more important.”

Wealth Management

How to Choose the Best Performing Mutual Funds

ByCFI.co

The total net assets of mutual funds worldwide were over $14 trillion in March of this year.

Mutual funds are a hugely popular investment vehicle globally. However, there are a huge number of them out there, with the quality of returns varying significantly from one to the next.

For a newcomer to the world of investment, it can be difficult to know what to look for in a mutual fund. The best performing mutual funds in the past may not continue to post exceptional returns in the future, especially in these uncertain economic times.

Read on as we take a closer look at mutual funds, and what to look for when investing in one.

What Is a Mutual Fund?

A mutual fund is a type of investment fund. A team of professional investment managers take capital from a large number of investors and invest the resulting pool of money in various securities.

Essentially, it is a means of investing in capital markets indirectly. Rather than picking stocks or bonds and putting money into them yourself, you allow a mutual fund manager to make the choices for you.

The advantage of this is that your investments are made by a highly experienced investment professional. This is safer than picking investments yourself, especially if you’re new to the world of investment.

The Different Types of Mutual Fund

There are many different mutual fund types. You can categorize them on the basis of the types of securities they invest in, the way they are managed, and the level of risk they take on in seeking returns.

To pick the best mutual fund for your needs, you need to know what your investment objectives are. These will dictate the type of fund you should pick.

Index Funds

Index funds are so named because they track the performance of a given index. Common indexes that form the basis for these funds include the S&P 500, the Dow Jones Industrial Average (DJIA), and the Nasdaq Composite (IXIC).

Index funds are an example of a passively managed fund. No input is required from investment managers, as the fund simply tracks an index.

Passively managed funds typically have much lower fees than actively managed funds for this reason. As outlined below, many investors who want a passively managed fund opt for an ETF rather than a mutual fund.

Stock Funds

Stock funds invest in a range of different stocks. Unlike index funds, fund managers actively pick these stocks individually and will chop and change them based on market trends.

Stock funds are therefore an example of an actively managed fund. Their fees are higher than some alternatives.

Stocks are riskier securities than bonds or other fixed-income securities. The risk of loss with a stock fund is therefore relatively high, but the opportunity for gain is greater as well.

Investment approaches vary widely from one stock fund to the next. Some managers will make more of an effort than others to diversify their holdings and hedge risks.

Specialty Funds

Specialty funds can be thought of as occupying a kind of middle ground between stock funds and index funds. Investment managers pick the stocks themselves, but within certain boundaries.

These boundaries typically relate to a market type. For instance, a cannabis market specialty fund will only invest in cannabis stocks.

Fixed Income Funds

Fixed income funds invest in low-risk securities. These include Treasury notes and bonds, as well as highly-rated corporate bonds.

These mutual funds cater to investors who prioritize income over growth.

If you’re simply trying to manage your money better with a view to long-term savings, a fixed-income fund might be just the thing for you.

Mutual Funds vs Other Fund Types

There are other types of investment fund that you may have heard about. While these can bear similarities to mutual funds, there are important distinctions to be drawn in each case.

Exchange-Traded Funds (ETFs)

The ETF is a close cousin of the mutual fund. Both types of fund take payments from investors and use these to invest in a variety of different securities.

ETFs tend to focus more on passive strategies than active ones. Many ETFs track indexes.

Mutual funds also tend to have more complex structures and a greater variety of share classes.

Hedge Funds

Hedge funds are another type of pooled investment fund. However, there are a number of important differences to be aware of with hedge funds.

Hedge funds use a number of complicated strategies to extract higher returns from their investments. These include high-frequency trading and short selling.

Hedge funds typically charge much higher fees than mutual funds.

Because of their complex, risky strategies, hedge funds are generally only available to professional investors, or those with a large number of investable assets.

What Sets the Best Performing Mutual Funds Apart?

There are certain mutual funds that regularly outperform their competition. While it is impossible to say exactly what the winning formula is for these, there are certain things that profitable funds have in common.

The first thing you should look for is a low expense ratio. A better approach to cost management means lower costs for you, and also indicates fiscal prudence on the part of the fund managers.

For actively managed funds, quality management is the key consideration. Look for managers with a proven track record of providing results.

Putting Your Money to Work

Mutual funds are a diverse family of investment vehicles. Some are designed to seek huge gains, while others simply aim to provide steady growth for clients looking to retirement.

The best performing mutual funds have consistent objectives that they stick to. The best investors do exactly the same thing.

When you’re deciding on your next mutual fund investment, start with a clear goal in mind.

If you’d like to learn more about the work we do or the topics we cover, contact us today.

Business

Working from home: Are you breaking confidentiality laws?

ByCFI.co Blogger

What happens to confidential waste while working from home?

With employees working from home because of the Covid-19 outbreak, how safe is the information they’re accessing and disposing of now it’s out of the office?

According to one specialist waste handling organisation, remote working means new headaches for companies and their data security.

UK waste collection agency BusinessWaste.co.uk knows that even during the crisis of a pandemic, confidential waste must be disposed of correctly in order to protect businesses and their customers from fraud or blackmail.

“Even if people are working from home, they need to be mindful that any waste they create needs to be destroyed in the same ways it would if they were in the office,” says BusinessWaste.co.uk company spokesperson Mark Hall. Companies could still be in line for massive fines if they get it wrong, Hall warns.

What counts as confidential waste?

Essentially, confidential waste refers to documents possessed by any company that can expose discrete information about suppliers, customers, or employees.

“Basically, if it details any information about the nature of your work or anyone associated, then it counts as confidential information which will need proper disposal,” says spokesman Mark Hall.

However, it can be very tricky to distinguish what counts as confidential waste, as many businesses work with different mediums of materials.

BusinessWaste.co.uk has compiled a list of different types of confidential waste, making it easier to understand which work-related items will need expert disposal.

Personnel files and contracts – including CVs and application letters
Financial records – such as order forms, invoices, bills and statements
Health and social care records
Criminal Records
Business cards, ID badges, and security passes
Letters, memos, and other items containing names and addresses.
New business proposals and business plans
Used notebooks
Product samples or profiles
Research data
Diaries
Photographs

“If you’re working from home, you need to be aware that any of these resources could contain confidential details which could be dangerous in the wrong hands,” says Hall.

“So please make sure you or your staff don’t throw this information into the household waste!”

What could happen if it’s not disposed of properly?

Failing to dispose of confidential waste can lead to a variety of outcomes, ranging from prosecutions under the law to identity theft and fraud.

“Your company could fall victim to industrial espionage, so it’s really important to make sure that private information cannot be leaked to rival companies through improper disposal,” says Hall.

Although it might be easier to just chuck all rubbish into your household waste bin, there are legal implications such as breaching the UK 1988 Data Protection Act, which regulates the collecting, storing, and destroying of confidential data.

Any companies that fail to oblige the act can face crippling fines from the UK data watchdog, the Information Commissioner’s Office.

“This is serious stuff that could ruin a company’s reputation and lose customers,” says Hall, “and if you’re the one discovered to be doing it, you could be fired.”

Confidential waste needs to be disposed of by a licensed waste removal company in order to comply with the latest laws and guidelines.

Actions you can take now

BusinessWaste.co.uk recommends that all members of staff be reminded about company policies regarding waste, and firmly told not to chuck any work materials into their household rubbish.

Mark Hall says that in an ideal world, sensitive information should not leave the office, so the best thing for businesses to do is to try to restrict what is essential and needs to be taken home.

Another suggestion from Hall is to make as many work tasks computer-based as possible, with sensitive files only accessible from a secure device approved by your company.

“The best thing you can do if you’re unsure is to keep all information secure and together at your home workspace, and when it is safe to do so, take it all back to work for proper disposal,” says Hall.

“If in doubt, don’t chuck it out.”

For further information see https://www.businesswaste.co.uk/confidential-waste/ and https://www.businesswaste.co.uk/waste-transfer-note-faqs/

Finance

Bitcoin’s coming of age? May’s historic halving taking place in a new era

ByCFI.co Blogger

The Bitcoin price will hit ‘at least $10,000’ even before the four-yearly ‘halving’ event taking place in two weeks, predicts the CEO of one of the world’s largest independent financial advisory organisations.

The prediction from the chief executive and founder of deVere Group, Nigel Green, comes as the price of the world’s largest cryptocurrency suddenly soared by more than $1,500 on Thursday, moving it to its highest value since February. It peaked at $9,400.

It comes ahead of May’s highly anticipated halving event. Occurring every four years, halving means that less and less Bitcoin – which is limited to 21 million units – will be mined.

In 2012, the number of new Bitcoins issued every 10 minutes fell from 50 to 25. In 2016, it went down from 25 to 12.5. Now, in the 2020 halving, it will drop from 12.5 to 6.25.

Mr Green says: “We see the cryptocurrency market already significantly picking up pace ahead of the historic event in May.

“Investors are now increasing their exposure to Bitcoin as the halving – only the third in its 11-year history – will push up prices sharply due to the dramatically lower supply combined with a steady demand and increasing awareness of digital currencies.”

Previous Bitcoin halving events have prompted impressive price climbs. The 2016 halving triggered a 300 per cent jump in the value of Bitcoin.

But the 2020 one could be even more remarkable, believes the deVere CEO.

He notes: “May’s event could herald Bitcoin’s coming of age.

“It will, of course, drive prices higher – but, in my opinion, the jump could be even more impactful due to these unprecedented times.

“The digitalisation of our lives is accelerating at a faster pace than ever before. We’re in an exciting new era driven by technology.

“This new world needs new ways of doing things to fit the new normal. Clearly, one of those things which is needed now more than ever, as the world becomes ever-more digitalised and globalised, is digital and global currency, such as Bitcoin.

“This will not have gone unnoticed by investors who are increasingly piling into cryptocurrencies.”

Mr Green continues: “Also, these unusual times have forced central banks to increase monetary supply. By printing never-seen-before amounts of money, traditional currencies are devalued and inflation fears rise.

“This will also drive investors towards decentralised, non-sovereign digital currencies.”

Mr Green concludes: “The excitement of the forthcoming rare halving event, together with the new era we’re in, will drive the price of Bitcoin exponentially and sustainably.

“I believe we can expect it to hit at least $10,000 before the May event itself.

“Beyond that, we could see an explosion in the price of Bitcoin due to real-world issues it addresses and increasing adoption.”

Investment Management

How a Financial Consultant Can Help You

ByCFI.co

For most people, money is one of the primary driving forces in their lives. After all, you need it in order to buy food, shelter, clothes, and all other goods and services.

Money causes stress while also providing a sense of security. Much of your time and effort are invested in your career to provide a certain standard of living for your family and to prepare for retirement.

A skilled financial consultant can help you reduce debt and make the most of your money. This article takes a look at the reasons why you should consider working with an advisor to prepare for the future.

They Help You Understand Your Goals

Believe it or not, many people have no idea what they really want. Even though the average life expectancy is around 73 years, few people approach the future with any sort of goals in mind.

A lot of the population lives paycheck to paycheck, without much rhyme or reason to their financial decision-making.

A chartered financial planner will ask a series of questions designed to encourage you to think about the future so that you can plan accordingly. This will enable you to be conscious of the financial decisions you make going forward rather than simply winging it as you have in the past.

They Help You Develop a Plan

Once you’ve figured out some of your long-term goals, you’ll be able to develop a plan for how to actually reach those goals.

A good plan provides structure, enabling you to create a step by step roadmap that can be adjusted year after year as your wealth grows and your goals shift and change.

Advisors are skilled at building a financial investing plan. This will be specifically tailored to meet your needs. The more specific you can be about what you want out of life, the more they can help.

They Show You the Best Ways to Invest

There are many ways to invest your money. Each type of investment tool offers different degrees of risk and reward. The key is to understand how aggressive you want to be in building wealth.

This requires working closely with your advisor.

Be open and honest. This will provide valuable information that will help them know how best to proceed. It’ll also help them find the most efficient resources and tools to utilize when managing your wealth.

Keep in mind that an experienced financial advisor will explain all the investment options that are available, along with the pros and cons that come with each.

Don’t feel pressured to invest too aggressively, but also listen closely to their advice. Try to be as open as possible to educated advice regarding ways to maximize your investment funds.

They Help Avoid Stupid Investments

It’s important to remember that your financial advisor is an expert. Investing is a complicated business, with an incredible amount of data to track and variables to consider.

Because of this, it can be easy to make a mistake, to chase a trend that’s leading to a dead-end, or to find yourself excited about an investment opportunity that will only end up costing you money and causing frustration and pain.

An experienced advisor will help you avoid as many mistakes as possible. They have the training and skills needed to identify bad trends and unreliable sectors in the marketplace.

It can be hard to trust someone with your money. Especially when you feel like you’ve discovered a great investment opportunity. Yet, trust is exactly what will be required in order to build the level of wealth that most people only dream of.

They Provide a Sounding Board

A good advisor will also be a great listener. This might not sound like a big deal, but it’s actually one of the most important qualities to look for when seeking an investment professional.

You should never feel hesitant to talk to your consultant like a real person. Tell them your hopes and feelings. Mention ideas you’ve been thinking about, and never feel stupid for asking tons of questions.

Remember, they work for you. They are there to answer questions, provide feedback, and help give you confidence that your future is on the right track.

They Help Enforce Financial Discipline

Saving money isn’t fun. It can be a huge challenge.

After all, it’s much more exciting to spend money on shiny new toys rather than sock cash away for the future.

This is another reason why an experienced consultant is so valuable. They will help you keep your eyes on the prize because they won’t have any emotional attachment to your finances. This means they can approach making smart investments and building your wealth from a purely educated and logical vantage point.

They Help You Connect With Other Professionals

Your financial advisor will also connect you to a good lawyer and accountant. This will help ensure that your money matters are legal, and keep any potential tax issues from arising.

They Help You Relax

Finally, knowing that you have an experienced consultant on your team will help you relax. You have a pro working for you, after all.

They’ll choose investments that will make your money work for you, and grow your wealth day after day. You can rest assured knowing that when you’re ready to retire, you’ll have the resources to enjoy your golden years to the fullest.

A Guide to the Benefits of Hiring a Financial Consultant

Planning for retirement can be confusing. Fortunately, hiring a skilled financial consultant will help make the process a little less stressful.

Click here to learn how to form an investing strategy for European markets.

Economics

Towards economic recovery: a simple, quick and targeted way for authorities to support those most in need

ByCFI.co Blogger

As political leaders across Europe are contemplating how to best prepare the restart of our economies, European Fintechs Loyaltek and Paynovate launch the Unity Card (unitycard.eu): an initiative enabling authorities to financially support certain segments of the population, such as the most underprivileged, but also to specifically target local retailers and merchants who’ve had to close their businesses.

The special payment card, which will exceptionally be free to municipalities as the first, local level of power, can be delivered anywhere on the Old Continent in as fast as 2-4 weeks and avoids cumbersome logistics and administration, allowing for effective, ultra-targeted, monitorable and evolutive socio-economic measures on the road to economic recovery.

Brussel, 24 april 2020. As the Corona curves are slowly but surely starting to flatten, the focus is gradually shifting towards the next challenge: relaunching the economy. Whilst national governments and international institutions across Europe and the world are announcing unprecedented crisis measures, it remains to be seen if these will be enough, and especially, whether the aid can be deployed quickly enough to save those in need today. Therefore, decisive action needs to be taken today rather than tomorrow.

With a view to this, European FinTech pioneers and veterans Loyaltek and Paynovate are teaming up in a unique proposal to political leaders, with the aim of offering citizens much needed and rapid financial support by means of the Unity Card. As innovative as it is useful, this debit card can be limited for use in a certain geographical area (e.g. one municipality) as well as a certain types of predetermined shops or businesses, in this case those that have been forced to close during the current crisis: hotels, restaurants, bars, hairdressers, DIY-stores, clothes stores… As such, it is the perfect instrument to stimulate the local economy and prevent the money disappearing to foreign e-commerce websites, being sent to family abroad, or saved.

“Whether it’s to support merchants who have had to close their business or to help a mother feed her children: our leaders, from municipal to national level, are looking for ways to mitigate the effects of the lockdown and prepare for a return to normal life and economic recovery,” explains Robert Masse, founder and CEO of Loyaltek and expert in the field of card payments. “But time is running out, and the question arises as to how to allocate these various resources as quickly and efficiently as possible, while at the same time avoiding any risks of fraud and ensuring that public money serves its intended purpose, to the extent of creating a win-win situation and benefiting society as a whole.”

The Unity Card has a maximum value of €250 and works just like a regular debit card on payment terminals. The validity period can be adapted in function of the needs and intended support. Users can check the remaining value thanks to a QR code on the back, while an extranet allows the issuing authority to monitor, analyse, manage and even adjust the way its cards are being used, all in real-time. And thus, once again in this crisis, it’s new technologies that are offering relief in a situation which at first seemed insoluble.

“In a spirit of social commitment, our R&D teams wanted to make themselves useful against the horrors of the Corona virus. Ultimately, it’s the pragmatism and the potential of this solution which convinced us to set up the necessary partnerships to deploy it throughout Europe,” concludes Robert Masse. “The name, which of course stands for solidarity, came naturally, and we have decided to offer the first 5,000 cards to each of the municipalities that want to work with it, given that they’re the ones closest to the situation on the ground. Implementation costs are kept to a minimum and amount to a fraction of the usual costs of similar ‘traditional’ measures. Moreover, we do not take any margin on the transactions.”

The solution proposed by Loyaltek and Paynovate has proven its worth before in Germany at the time of the migration crisis, when authorities distributed thousands of similar cards to manage the allowances of Syrian refugees, allowing them to provide in their most basic needs by purchasing from local merchants.

The appearance of the Unity Card can be personalised if necessary. It is distributed either directly to the beneficiaries or by group transmission to the competent authority, which can then further distribute it. The payments made by citizens with the card are managed together with the rest of the merchants’ payment traffic, while cardholder support is ensured by Loyaltek or the ‘customer’ himself, i.e. the issuing authority.

Loyaltek NV is a European leader in limited range cards and manages numerous gift card and professional expense cards programmes in 14 countries. Its clients include Sodexo, Ingenico, Total and a great number of major commercial real estate players. They call on Loyaltek’s expertise for specific and technically advanced projects.

Paynovate NV is one of the six Belgian issuers of electronic money, regulated by the National Bank of Belgium and authorised to issue payment instruments in all European countries. Paynovate is also a principal member of Visa and Bancontact.