A question I often see from investors is, “How can I ensure I’m making smart investments that can respond to changes in the market?” It’s a simple enough question, but the answers can vary significantly. The most common advice many investors receive involves the utilization of mutual funds. However, once you sink an investment into a mutual fund, it’s not always easy to get back out of the market. Whether you want to cash out some of your investment or move everything somewhere else, you’ll find many rules governing what you can and can’t do with your money.
I like to let people know that there’s another smart option out there, too. With a tactical money manager working on your behalf, you can make smarter, faster moves. What are some of the overall perks you might enjoy from partnering with this type of money manager? I think there are three points worth our attention.
Achieve even greater diversification in your investments
Two key benefits of investing through a mutual fund are the pooling of risk between fund members, and the way investments are spread out to provide a diverse portfolio. However, your money is locked into the choices made by the fund’s manager. If you want to stretch your investments and go farther afield, you’ll have limited options. However, authorizing a tactical manager to work with your money provides more opportunities. This isn’t just a “buy and hold” strategy. Instead, a tactical manager looks at the market daily and varies your investments between different asset classes.
