There are a seemingly endless number of financial professionals willing to help manage your money. So where should you start when it comes to deciding whom to choose for your asset management? This can be a difficult decision and not all professionals have the same characteristics, experience and qualifications. For instance, having a local manager may be convenient, but if that manager doesn’t have experience managing money through multiple market environments, is that manager the best choice for you? When determining who has the best qualities to manage your money, there are many factors you should consider to ensure that you can meet as many of your long-term financial goals as possible.
One factor we believe investors should consider is a global investing approach. Some managers may not invest beyond securities that can be found in their part of the world, or perhaps even in their country. This approach can introduce their clients to concentration risk. Concentration risk is the risk of having too much of your portfolio concentrated in one part of the market, reducing diversification and potentially increasing the risk of volatility.
Investing globally can reduce concentration risk, increase diversification and provide exposure to growth potential in other areas of the market. No single equity style, sector, country or region outperforms others all of the time. Global diversification not only spreads out your risk across various countries but also puts you in a position to take advantage of global investing opportunities you may miss by only investing in one geographic region.
Before making the decision on where to invest your assets, you should have a good understanding of the capabilities of the adviser that manages your assets. You should understand whether your firm has the research capabilities to invest globally.
You should find a money manager who has the capabilities to achieve your long-term financial goals. Some asset management firms may specialize in one area of the market or have a narrow investment strategy, and for some investors that may be exactly what they are looking for. Other investors may want a firm that has an international reach and is able to capture global investment opportunities.
Of course, there is other information you should consider when evaluating money managers. Are you looking for a firm that will simply take orders from you and place trades, or are you looking for a firm that will act as a discretionary money manager and make decisions on your behalf? Some investors want to play a large role in investment decisions—and that’s fine. If this is you, make sure that you highlight that early on in your search, as this will save you a lot of time as you interview firms.
Other investors find great value in having a firm that is willing to monitor global markets and make decisions on their behalf. Having an understanding of your ongoing involvement is a great place to start your search.
Fisher Investments, the parent company of Fisher Investments UK has managed global discretionary accounts for private investors for decades. Our goal is to provide continued service and education on global markets in order to meet the financial goals of our clients. If you are interested in learning more, please contact us to learn more today!
Investing in financial markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. Past performance neither guarantees nor reliably indicates future performance. The value of investments and the income from them will fluctuate with world financial markets and international currency exchange rates.