Investments

Investments

Nearly three quarters of all U.S. households invest in the stock market. And half of all U.S. households invest in mutual funds—the nation’s fastest growing type of investment. Some investors are saving for a comfortable retirement, other’s for a child’s education. Whatever their goals, shareholders benefit from broad diversification, professional investment management, and ready access to their money. If one decided investing was a sound way to secure their financial future, their next step is to build a balanced portfolio by selecting an investment company and/or suitable investment types. While it may seem daunting—and even overwhelming—there is always someone who stands ready to help an investor.

EXPERIENCE

Investment Principles

In my experiences in dealing with many investment companies, I’ve seen and done many tasks in helping novice and advanced investors chart a course to their financial well being. I have over two years of investment experience with the second largest investment management company in the industry, The Vanguard Group. The company I work for is an old, conservative company with many long-standing values. For example, client-focused values, competitive investment offerings, low costs, diverse fund offerings, and responsive client service. The company was founded on those reasons and continues to prove their great reputation and established lower cost concepts. However, with the changing of the times, so should the company, but in Vanguard’s case its not happening

for the benefit of our clients. Vanguard uses a canned financial plan for people we consider conservative, moderate, or aggressive investors. This works in some cases but

the problem that I have is every person’s situation is different than the client before. I feel each client should have individual planning based on his or her specific situation. This is a very hard task for a company that has only three offices in the U.S (Valley Forge, PA, Charlotte, NC and Scottsdale, AZ). This benefits the clients because it does lower our costs dramatically, however, it makes things difficult for us to properly plan one’s retirement to the fullest investment potential possible, in other words, making their investments suitable for each client.

Practices and Products with Emphasis on Problems of the Small Investor

That brings up another problem I’ve had...

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...on many exchanges around the world and are continuously traded throughout the day. Thirdly, investors can choose to invest in individual bonds or bond funds. Bonds invest in long-term debt, and they typically earn the largest part of their total returns from interest payments—but they can also generate capital gains or losses. And lastly, investor can invest in mutual funds. Mutual funds are many different companies common stock lumped and managed together making one fund investment. Mutual funds have been around for 70 years and have only grown in popularity in recent years. One can invest in many different types of mutual funds, for example, stock funds, bond funds, and balanced funds.

With all that to swallow, one should entrust their money to a company that offers competitive investment performance, has a well-earned reputation for integrity and honestly, and provides investors with responsive and courteous service. If an investor isn’t comfortable managing their own money, they should then consider a professional advisor, because one’s money can’t make money if it’s not invested.

Bibliography

Morningstar. Real Expectations For Market Returns. 2000. www.morningstar.com.