If, like many other women at Elfin, you want to take your financial future seriously (do you want to!), investing is a topic you can’t ignore. But let’s face it, it can be confusing. Sometimes you can’t see the forest for the trees. Stocks, ETFs, bonds, funds and finally things like managed investing, self investing, guided investing. Terms like managed and guided investing are often used interchangeably, but what do they really mean? More importantly, which of the two suits you best? In this article, we unravel the difference between managed and guided investing.
What is managed investing?
Managed investing is a form of investing where a professional asset manager manages your portfolio. Sounds fancy, doesn’t it? But it’s actually quite simple. These experts will take all the tough decisions off your hands. You don’t have to worry about which stocks to buy or sell; it’s all done for you. It is a hands-off approach that is especially useful if you do not have the time, knowledge or patience to invest yourself.
What is guided investing?
Supervised investing is a different beast. In this scenario, you get advice and guidance from a financial advisor, but the final decisions rest with you. You are guided through the process of investing, so to speak. It offers a more hands-on experience and is suitable for those who want to be involved in their investments, yet could use some professional help.
Self Investing
Next, you also have the taste: self-adding. Here you do everything yourself. From determining your strategy, choosing your platform and choosing your investment products. Can you, not of that. It’s just what suits you.
Which is better?
Ah, the key question: which is better? The answer is not black and white. Both forms of investing have their own advantages and disadvantages, and which is best for you depends on your personal situation and preferences.
Managed Investing:
- Benefits: Time-saving, professionally managed, less stress.
- Disadvantages: (often) higher costs, less control.
Guided Investing:
- Benefits: More control, lower costs, educational.
- Disadvantages: Time intensive, requires some knowledge.
How can you do managed investing?
If you have decided that managed investing suits you, there are several ways to get started:
- Research different asset managers: Look at their track record, fee structure and investment strategies.
- Open an account: You can usually open an account online. See an article about investment platforms and how to choose one that suits you here.
- Deposit money: Depending on the asset manager, you have to make a minimum deposit.
- Leave it to the experts: Once your money is in your account, wealth managers will take it from you.
How can you do guided investing?
For guided investing, follow these steps:
- Find a financial advisor: Find someone who fits your financial goals and comfort level. Check out the wealth advisors affiliated with Elfin.
- Make a plan: Together with your advisor, draw up an investment strategy.
- Open an investment account: You can often do this yourself or with help from your advisor.
- Start investing: With your advisor’s guidelines, start investing.
How can you invest yourself?
This requires some extra preparation, as you will have to learn about what it means to invest. But luckily you’ve found Elfin 😉 Follow for example our online course Starting to Invest where you really learn all about investing. Includes tools and handles to create your own strategy, choose your own platform and choose your own product.
How do you determine what suits you?
To determine what suits you, ask yourself the following questions:
- Do I have time to delve into investing?
- Do I want to hand over control or would I rather keep it myself?
- What is my risk tolerance?
- Do I have specific financial goals?
Think carefully about these questions and then decide which form of investing suits you best.
There you have it: the difference between managed and guided investing, explained in a way that will hopefully help you make an informed choice. Regardless of your choice, remember that investing can be a powerful tool to achieve your financial goals, but there are risks involved! Read more about the risks of investing here. So what are you waiting for? Take the reins and start your investment adventure today!
