ADVFN Logo

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for discussion Register to chat with like-minded investors on our interactive forums.

Managed Accounts and Funds: Pros and Cons

Share On Facebook
share on Linkedin
Print


Hiring someone else to do your investment for you sure sounds appealing. But what are the disadvantages of managed funds?

We asked you to send us your questions about forex trading so today I’m here to give an A to your Q. The question we picked this week is from the Twitter account @ClayLoveDay says I taught him everything he knows about Mr. Japanese Yen.

@ClayLoveDay asks:  “Please describe your opinion on using artificial intelligence and managed accounts.”

From the not very sunny Virigina Beach this video is brought to you by Invest Diva

 

We are going to do a  Jimmy Fallon style Pros and Cons on this one, but first let me tell you this: This is the finance world. Everyone is out there to make money for themselves.  And only you can take care of your hard-earned money the way it needs to be taken care of. It’s kind of like hiring a nanny for your child. While there are many qualified caregivers out there that can replace a parent temporarily, it takes a qualified parent to identify a good nanny, and the job of the parent can never be fully replaced. Especially by a robot  We will cover algorithm trading in our next video but for now, let’s get into Pros and Cons of hiring an account manager to invest your money on the forex dance floor.

 

PRO

CON

The money manager may have more experience

He/She may not pay full attention to your account

You don’t have to learn how to trade.

You can easily be fooled by your money manager’s track record

You don’t spend any time trading!

You will never gain the confidence to trust your own judgment

You can focus on your main career

You deprive yourself of the experience that is required to make robust financial decisions

You don’t have to deal with the emotions involved with trading

Your money manager could run away with your money to Isle of Man

PRO: The money manager may have more experience due to long term involvement with the markets.

CON: He/She may not pay full attention to your account and may miss out on opportunities or even ignore minor losses. Con: Unless you are a very high-paying client, the money manager may not pay full attention to your account and may miss out on opportunities or even ignore minor losses.

PRO: You don’t have to learn how to trade.

CON:  You don’t know how the markets work and therefore you can easily be fooled by your money managers track record.  Just remember, past performance is not a guide to future results: A past record of positive returns does not guarantee similar performance in the future.

PRO: You don’t spend any time trading!

CON: You never evaluate the market independently and therefore you will never gain the confidence to trust your own judgment. Ultimately, you cede all the power to the manager which could lead to unpredictable and potentially dangerous results.

 

PRO: You can focus on your main career instead of learning to invest your money on the side.

CON: You lose the opportunity to learn the markets. In essence you end up depending entirely on the money manager and therefore you deprive yourself of the experience that is required to make robust financial decisions.

 

PRO: You don’t have to deal with the emotions involved with trading

CON: You hand over your money to someone who has no emotional attachment to your money. And in the case of a bad selection of a money manager, he or she could even run away with your money to Isle of Man where my hard- earned money now resides.

One major reason why many professionals prefer to invest their own money is the horror stories you might have heard from people around you, who gave their money to “professional traders” or the so-called “money managers” who got their money and lost it. I was actually a victim of this years ago before I got into trading myself. As an over-achieving college student on scholarship with various sources of income on the side, I was approached by a company from Friends Provident called Cambridge Capital (and yes I’m naming names) who got me into giving them around $100,000 over time so that they will trade it for me in mutual funds, and guess what, I never saw that money again (and I most likely ever will.)

But instead of focusing on the downside of trading, I decided to take control of my hard-earned money, and learn to trade by myself. After all, no one cares about your money more than you, right?

Watch Below Video to Learn How to Overcome Fear of Trading

I could obviously go on, but the simple fact is we all work hard to make money.  Why would you then take the easy path when it comes to investing this hard earned cash?  There is no one out there that will care more about your money and your future than you, so it makes sense that with a little effort you will be the best option when it comes to investing your own money.  The secret of course is to get educated, and that doesn’t mean lots of time and energy … that means learning a few simple things. book your private trading lesson

As your Invest Diva I’m always here to help. Book your private lesson with me today or enroll in our video education course. Definitely, share this video with your friends who are also interested in investing their hard-earned cash.

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Comments are closed

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com