Should You Rely Upon An Adviser To Manage Your Investments?

Some investors see the expense of an adviser as an avoidable and unwanted loss. Thus, many choose to advise themselves and manage their own investments.

Many investors wonder whether they should rely upon a financial adviser to manage their investment portfolio. Although this approach will save them hours of investment research, and prevent many sleepless nights, commissions and fees will reduce profits and lower returns. In the eyes of some investment-seekers, this expense is seen as an avoidable and unwanted loss. Thus, many choose to advise themselves and manage their own money.

In order to be of any value to an investor, a money manager or adviser is expected to closely monitor international developments and stay constantly aware of changes in the world’s financial markets. This means watching gold, bonds, ETFs, stocks, and more. Moreover, managers/advisers are relied upon to swiftly apply their insight to the funds they manage; often for an almost unmanageable number of clients.

The trouble with relying upon a financial adviser or money manager is that the content they consume is subject to their own interpretation. This means that investors are relying heavily upon their adviser or manager to have a proper, unbiased, factual understanding of the information presented. It is no place for personal, unsubstantiated opinion, like this example with Davenport Laroche discovered on an adviser’s website.

A growing number of investors are choosing to do independent investment research to gain their own understanding of the investments in their portfolio. This allows them to better assess tolerance for risk and understand how each investment is performing. The result is a more confident investor that can build and maintain a strong investment portfolio, without the help of a costly fund manager.

The downside to being your own investment adviser is that the responsibility to stay informed falls squarely on your own shoulders. Likewise, in the event of a worst-case scenario, the blame is also entirely yours. In some instances, the adviser’s fees will be less than the losses that an inexperienced investor could potentially incur.

Some Money Managers And Advisers Publish Bias, Untrue Reviews

I have seen some instances where money managers and advisers have contributed to fake news by publishing bias, untrue investment reviews. They do so with the intention of discrediting others and in turn making their investing offerings seem more enticing. An example of this comes from Alexis Assadi, a financial, investment adviser from Canada.

Taking the position of a conspiracy theorist, Assadi suggested that there is collusion between three leading container leasing companies. He argues that this conspiracy is a danger to investors. What is his motivation for making such an accusation? To attract and retain clients for his financial services.

Aside from leasing containers to shipping companies, the intended targets of Assadi’s attack also offer an opportunity for investors to invest in containers, and earn a better rate of return than Assadi can deliver. It is possible that Alexis Assadi fears that this may cause prospective and existing clients to pursue container investment opportunities outside of his portfolio. Doing so would mean a loss in revenue, profit, and opportunities for him.

Advisers like Alexis Assadi also rely heavily upon newsletter subscriptions, generated from their website, to build a list of prospective clients. Encouraging more traffic to his webpages, by any means necessary, is a proven way to build newsletter subscribers. This is especially important to Assadi because he can continuously market his investments and services to these unsuspecting people afterward.

In my mind, Assadi fails to establish any definitive proof of collusion between the companies he has targeted. Instead Assadi shares a grandiose theory and opinion to cast doubt in the mind of the investors who find container investing more appealing than anything he has to offer. Alexis Assadi is by no means the only financial adviser to engage in this type of defamation. The practice of libel and slander is more widespread than investors are aware of.

This is Why You Should Invest in Containers

Disappointment from traditional investments has prompted investors to invest in other options. Among the leading alternatives is shipping containers.

With disappointing performances over the last decade, the traditional choices for investors to invest in are quickly losing their appeal. This has prompted investment-seekers to choose other options when building their portfolio. Among the leading alternatives is shipping containers.

To support the global economy’s constant growth, the demand for shipping containers is always increasing. To meet the needs of their customers, container transport and leasing companies must continue to invest and innovate. This means introducing new technologies and operations that will improve their performance.

Container owners are a fortunate group. For those who invest in containers, the world is full of opportunities. Whether private investors invest in one or many containers, they will profit from the world’s constant economic growth. Looking ahead, global economic growth is expected to rise from 3.1 percent in 2016 to 3.5 percent in 2017 and 3.6 percent in 2018.

Containers are extremely versatile and have many applications in world trade. Computers and laptops from China, textiles from India, and perishables from South America are among the imports and exports that are frequently transported in cargo containers. This worldwide dependence upon them reinforces their value to the investors that invest in them.

When investors search for something to invest in, they are generally concerned with two factors: exposure to risk and the investment’s rate of return. Investing in shipping containers has demonstrated that, like gold, it protects an investor’s money during financially challenging times. Furthermore, over the last 25 years, container investment returns have outperformed the traditional options that investors commonly invest in. This includes the S&P and bonds.

invest containers returns

Shipping containers are ideal for investors who would like to invest in an asset that consistently generates income and preserves wealth. And, the fact that cargo containers are needed to support worldwide economic growth, means that they are expected to be in high demand for decades to come. With the lifespan of a container being more than 20 years, people who invest can expect consistent returns for at least the next two decades.

How To Research Investment Opportunities Like a Pro

With so many opportunities to invest in, investors must research offerings with meticulous detail to uncover their best investing options. Doing so involves researching the company and industry, as well as reading investor reviews to gain deeper insight and a deeper understanding. This approach to choosing investments will help to determine the viability and profitability of investment offers, and identify risk factors that could affect returns.

Company Research

Look in traditional and digital publications for information that provides insight into key elements of the company’s operations. This includes corporation structure and corporate officers, profits, and financial commitments. This information will help you to determine the company’s position among its competitors, as well as forecast its future performance.

Industry Research

It is important to understand the basics of the industry the company operates in. For example, the global shipping industry has many divisions to invest in. These include charters, shipping containers, and infrastructure. In this instance, and in similar instances, investors should focus their attention and research on the specific sector of the industry their investment operates within. This will provide an outlook on what influences performance.

Investor Reviews

Scour the Internet for investor cautions and recommendations. For example, this Davenport Laroche review offers an investor’s experience and provides insight into the company and its products. This information can help investors determine their tolerance for risk and decide if/where the investment/s fit into their portfolio.

A Final Thought

Investment seekers who take a cautious approach to investing certainly appreciate the depth of knowledge that is needed to make a confident decision. Conducting extensive research into the company, the industry – or specific sector, as well as investor investment reviews, will ensure that investors can base their decisions on facts, not fiction. Investors can expect that this approach to investing research delivers better returns, and better sleep at night.

Investments That Need To Be Part Of A Long Term Strategy

One of the fundamental principles of investing is to invest with only the money you will not need in the short-term. In other words, do not use your mortgage payment or rent money to invest with. In my opinion that is called gambling. So, by the very nature of investing, you should be prepared to part with your money for an extended period of time.

Although there are some investments that can be profitable in the short term, like investing in real estate or collectibles, investors should focus on investments that will deliver returns “down the road.”

Bonds

A time tested strategy for making money investing in bonds is called “rolling down the yield curve.” This strategy involves buying longer dated bonds and selling them after twenty four to thirty six months, to profit from their rise in value during the first few years. This investing strategy is profitable for two reasons: the longer term bond pays more interest than the shorter-bonds, and the longer-term bond will rise more in value over time.

Exchange Traded Funds

Because exchange traded funds, more commonly known as ETFs, can be economically acquired, held, and sold, some investors invest in ETF shares as part of their long-term investment strategy. With just two or three ETFs, you can create a portfolio that covers nearly the entire equity market, as well as a large portion of the fixed-income market.

Shipping Containers

The shipping container is one of the most important contributors to the growth of world trade. Because the lifetime of a cargo container is more than 10 years, investing in shipping containers is regarded as a long term investment. During this decade-long period, investors can expect to earn a monthly return based on the performance of their container fleet.

The purpose of a long term investment plan can be to supplement an investor’s income during unemployment or retirement, or protect an investor’s portfolio against a worse-case scenario. In either case, it is important to focus on investments that deliver consistent performance, over a long period of time. This approach will work to preserve and build wealth.

Where Would Investors Invest To Earn Income For Retirement?

As investors move closer to retirement, they begin to reflect deeply on the investments they have made, and the money they have earned. The focus for most at this point is to supplement their modest monthly income, while they are retired. Among the leading choices for investment income are dividends, interest payments, and business revenues.

Dividends

A sum of money that is paid regularly by a company to its shareholders out of its profits or reserves is called a dividend. Typically distributed quarterly, and decided upon by the board of directors, dividends can be issued as cash payments, as shares of stock, or other property. Dividend payments may be structured as a one-time special dividend, or as a source of ongoing cash flow to owners and investors.

dividend payout

In many countries, the income from dividends is taxed at a more favorable rate than ordinary income. Investors seeking tax-advantaged cash flows, like retirees, may look to dividend-paying stocks in order to take advantage of potentially lower tax rate.

Interest

A payment from a deposit-taking financial institution to a depositor of an amount above the principal sum deposited is called interest. The interest is paid on money held in savings accounts, certificates of deposits, or other such investments. Interest income is usually taxable and, in most instances, the ordinary income tax rate applies to income generated from interest.

Business Revenue

Another way for investors to earn an income from their investment money is to invest in business opportunities. One of the best examples of this approach is investing in shipping containers. Under these circumstances investors purchase shipping containers that are then leased to shipping companies, and generate a monthly income based on their utilization.

In Review

With retirement lasting longer and longer, investors must choose investments that will continue to earn additional money for them each month. This is particularly important when you stop to consider the rising cost of living, and the looming threat of inflation. These two adverse conditions can quickly eat away at the value of an investor’s returns on investment.

To address the challenges posed by economic uncertainty, investors have begun to revise their investment portfolio to include more income generating assets. Whether it be dividend, interest, or business income, the investment community is preparing for an easier retirement, supported foremost by a strong residual income stream.

Choose Investments That Reduce Chances of Worst-Case Scenario

Before you start making investments, be certain that you have the funds to do so. If you are behind on your monthly expenses, have high-interest debt, or meager savings set aside for emergencies, it is recommended that you prioritize those aspects of your life first. If investing makes financial sense, meaning you are using money you don’t need for at least the next five years, choose investments that reduce your chances of a worst-case scenario; which is, of course, losing all of your money.

If you’re not willing to accept the worst that can happen, don’t do it. – Muriel “Mickie” Siebert

Investing all of your money into a single stock is risky investment strategy because your money is dependent upon the performance of a single company. Investors can minimize stock market risks by diversify their portfolio holdings. This includes investing in a variety of companies in different industries or regions. As an alternative to equities, some investors believe U.S. Treasury bonds and investments in hard assets are among the safest investments.

Across the globe, the current investment environment is very uncertain. Investors are facing a range of risks that could have a significant impact on their wealth. Some of these risks are well known. These include the geopolitical concerns created by Brexit, the election of Donald Trump, higher interest rates in the United States, and climbing debt levels in China. As well, policy risk is a growing concern for investors. Are governments making the right decisions? Is there the political motivation to see policies through?

All things considered, in 2017, the biggest challenge for these organizations will be to balance growth objectives with short-term liquidity needs. Investors should expect that there will be challenging years during the course of their investment career. But, over the long term, a commitment to investing and a well-diversified strategy have consistently proven to be the most successful approach.

There is a New Focus in The Container Shipping Industry

The container shipping industry has experienced a multitude of financial and logistical challenges in 2015-2016. These adverse conditions have caused shipping lines to review their performance and adopt an operational strategy that focuses on prudence and efficiency.

Prudent [Pru-dent] acting with or showing care and thought for the future.

In perhaps the greatest example of the action shipping lines are taking to demonstrate their commitment to improving operations in 2017 (and beyond), A.P. Moller-Maersk recently announced that it will divide its shipping and energy holdings. This move will allow the company to participate in opportunities in each individual sector, that it may have previously overlooked as a conglomerate. This means more focus on Maersk’s shipping and logisitics services.

If you are investing in cargo containers, or have gained access to the shipping industry through other means, the industry’s new focus offers a much more stable environment for you to forecast your investment returns. After all, less adversity in the market means more confidence for investors.

Partnerships & Alliances.

As the environment became more challenging in the shipping sector, container lines looked to establish partnerships and alliances with competitors and rival companies. This approach provides logistical advantages and has allowed container lines to pool their maritime assets and more efficiently deliver services to customers.

At the moment, the industry’s three established partnerships are:

  1. 2M Alliance – Maersk, Mediterranean Shipping Company
  2. Ocean 3 Alliance – CMA CGM, UASC, COSCO Shipping
  3. THE Alliance – Hapag-Lloyd, Kawasaki Kisen Kaisha Ltd. (K-Line), Mitsui OSK Lines Ltd., Nippon Yusen KK (NYK), Yang Ming Marine Transport Corp.

New Services and Trade Routes.

Industry leaders have also reviewed their shipping routes to maintain their operational efficiency. For example, in a move that focuses on the more profitable and prudent shipping opportunities in China, Maersk Line has removed 10 Chinese ports from their ports of call.

For many of the industry’s leaders, South American markets have demonstrated strong demand and shown they can be profitable. To benefit from this prosperity, the Mediterranean Shipping Co., CMA CGM, Hapag-Lloyd, Hamburg Sud, China Shipping, and Hyundai Merchant Marine are revising their existing services on the Asia-West Coast South America routes. In May of 2016, Maersk Line added a new southbound weekly shipping service between North Asia and the west coast of Latin and South America.

It’s Good News!

The container shipping industry is a business like any other business. And, in business, profit tops the list of important things to focus on. For leaders in this sector, it has meant taking prudent measures to reduce operating costs and increase their profits.

Some container shipping lines have introduced new, more profitable services and routes, while others have sought to strengthen ties with other companies and work in partnership toward making more money. In either case it means a rise in confidence in the industry, and that is good news for investors and shipping lines.

Make An Educated Decision About Alternative Investments

When you are trying to make your first alternative investment, there are so many different types of investing options to choose from, the process can quickly become overwhelming. This makes it all the more important for you and/or your adviser to understand the fundamental differences between non-traditional investing options, so as to be able to properly evaluate risk versus reward of alternative investments.

This article will provide you with deeper insight into the three main characteristics of alternative investments. It is my hope that the information I share will help you make a confident an educated decision, particularly with regards to:

1. Return Efficiency
2. Potential for Downside Risk Protection
3. Correlation to Traditional Market Risks

Return Efficiency.

The return efficiency of a good alternative investment is best measured by adjusting the raw return for the amount of return variability. Investors frequently use the Sharpe Ratio to make this calculation.

This Sharpe Ratio is a measurement of the excess return (or risk premium) per the unit of deviation in investment assets or trading strategies. This is typically referred to as “risk.”

An added benefit of using the Sharpe Ratio, is that it makes “absolute-return” outcomes easier for you to compare.

When seeking an alternative investment, you should always try to find the investments with the most efficient return profile. This will result in proportionately higher returns without the burden of uneducated risk, and will therefore deliver a great investment experience, and more capital over the long-term.

All things considered, a higher Sharpe Ratio should be a goal whenever investing in alternatives.

Potential for Downside Risk Protection.

Downside risk protection is the second characteristic that you need to carefully evaluate.

When evaluating the downside risk, you should always try to identify asymmetric return distributions. These are returns which are skewed more towards the upside, rather than the downside, and do not characteristically experience large drops in performance.

The asymmetry you seek are often found in the flexibility of alternative strategies.

Correlation to Traditional Market Risks.

The third and final characteristic that you need to evaluate when studying alternatives is their ability to deliver a return stream that is different from traditional investments.

By correctly understanding traditional market risks, you will be able to determine whether or not the investment can provide you with sufficient diversification, and protect you from the traditional investment risks in your portfolio.

Investors should always seek-out lower correlation investments to protect their capital from the poor returns experienced in traditional markets; like stocks and bonds.

When taking your first steps into the alternative investment market, you may want to begin with a single investment that is already completely diversified, and has proven it performs well in all types of markets. These kind of investments offer a nice balance of risk and stability over longer periods of time, serving as an excellent launching pad for any new investor.

Hard Assets: Attractive Alternative to Traditional Investing

Hard assets are commodities like gold, platinum, silver, copper, nickel, and oil. Based on their current asset performance, hard assets are in a Bull market that analysts believe could last for many more years. This can be attributed to the fact that hard assets are negatively correlated to stocks and bonds; meaning that they tend to behave differently and move in the opposite direction of equities. That said, hard assets are a popular way for investors to “cushion the blow” in the event that the stock markets take another tumble, or bond values fall.

hard asset investments appealing alternative

If preserving wealth is your goal, then investing in hard assets is an attractive alternative to risky traditional investments.

Aside from their non-correlation to traditional investments like stocks, hard assets are recognized as a safe haven for an investor’s capital. Remember the Cyprus banking fiasco? What happens to investors nowadays who place their hard-earned money in a financial institution that cannot guarantee the deposits? Let’s just say that hard assets play an important role in risk management within a portfolio, and that if preserving your investment principle and wealth is your primary goal, then investing in hard or tangible assets is an attractive alternative to risky traditional investment options.

Another reason that analysts are fond of hard assets is that the economies in China, India and other emerging markets, are growing rapidly. In fact, according to the International Monetary Fund, in the next five years Asia will represent a third of the world’s output and its economies will grow nearly 50 per cent. To me that statistic implies that we can expect significantly higher levels of energy consumption, as well as a rising demand for raw materials like silver and other precious metals. Looking ahead, as businesses and governments forecast their need for raw materials, I expect that we will see an increase the demand for hard assets, and in doing so, raise the value.

purchasing alternative investments is easy

In most instances purchasing alternative investments is as easy as purchasing stock was “in the old days.”

Making an investment in hard assets is more appealing and much simpler than it was previously. In today’s marketplace there are an increasing number of investment opportunities that invest in precious metals, gemstones and even shipping containers. These offerings are available from an investment broker, and in most instances are as easy as purchasing stock was “in the old days.”