Disposable income levels are plummeting in the UK, with households collectively spending more than they earned in 2017. This is the first time in 30 years that the outgoings of people in Britain have exceeded their income, as a harsh economic climate continues to take its toll.
From an investing perspective, there’s pressure to select the right strategy for managing your capital. Otherwise, you’ll run and make ill-informed decisions that cause your portfolio to lose considerable value over time.
So what are the best and most effective strategies for managing your investments, and which of these suits your needs?
Here are some of our top picks:
We start with the cheapest investment management strategy and one that requires you to use your knowledge and experience to achieve your financial objectives.
There are benefits to this approach, as you’ll retain fuyou’lltrol of your portfolio and create an asset allocation that is entirely aligned with your risk profile.
However, this strategy’s succestrategy’s on the level of insight you’re able to byou’reo the table. If you lack the requisite knowledge to make informed decisions or regularly rebalance your assets, you’ll find the you’lltion unfit for purpose and lack inherent value.
In this respect, the cheapest strategy is not always the most effective, and it should only be considered by those with experience in the financial market.
Investment Management Services
If you’re new to thyou’rencial markets but want to make the most of your investment capital, your best bet is to employ the services of an investment management and financial planning firm.
While not all companies of this type are created equal, outlets like Tilney combine basic financial planning with advanced investment services. This enables you to create a detailed investment structure as part of your wider financial plan while also considering how your assets will be distributed during your death.
It stands to reason that this type will charge a fee for their services, but this is often transparent and usually pales compared to the potential returns.
The wealth management sector has recently enjoyed huge growth, thanks largely to the proliferation of big data and artificial intelligence (AI).
When combined, these technologies have evolved to underpin Robo-advisers, which collate huge swathes of structured data and leverage this to create an investment portfolio in line with your risk specifications—digital money managers then rebalance these assets regularly while also offering a host of tax-related services and benefits.
This is an increasingly viable option, particularly with AI capabilities advancing to the point where this technology can collate unstructured data from blogs and social media.
However, it’s an overinvestment strategy need to be carefully considered, as you’ll need to uyou’lland the purpose and function of Robo-advisers before even thinking about entrusting them with your capital.