Investing Portfolio Types and Portfolio Diversification

The financial goals, investing skills and risk-tolerances are different among people. That is why everyone needs a personalized investment portfolio that address their needs, skills and resources. Based on the diversification and investment instruments, a portfolio can be grouped in to one of the five major portfolio types.

1. Defensive Portfolio: The diversification includes investing a majority of the money in low-risk investments. The investors look for long-term price accumulations rather than for quick returns. The common instruments include stock of blue-chip and growing companies, treasury deposits and bonds, commodities, precious metals, etc. Instruments with high-volatility and low-liquidity are generally avoided. The strategy requires good initial research, but less real-time management. Although the returns can be lower, the investors can avoid huge losses.

2. Aggressive Portfolio: This includes investing a major part of money in high-return, but high-risk investment products. Generally investors look for short-term profiting opportunities. The major investing options include stocks of all kinds, Forex currencies, funds and bonds, commodities, futures, indexes, real-estate, etc. The strategy requires an active real-time portfolio management, good money management and risk management skills. Also, the investors require good technical and fundamental analysis skills, software support and related trading infrastructure. Aggressive portfolio management can offer better returns, but there is also high risk of losses.

3. Income Portfolio: As the name suggest, the portfolio management involves investing in products that offer constant returns. Most of these returns can be fixed too. These returns usually involve interest on money investments, returns from bonds and funds, dividend from stocks and shares, or price appreciation on precious metals or commodities. The strategy requires good initial screening and involves lowest downside risk of all portfolio types mentioned here. The returns can also be lowest, but constant.

4. Speculative Portfolio: This is the portfolio type which requires most active management and involves investing in high-volatile high-risk and high-return financial products. This also includes investing with burrowed money and going against existing trends. The common investing instruments include stocks of new and small companies, IPOs, options, futures, currency pairs and on emerging markets. Investors should be extremely dedicated with good investment skills and resources. The returns can be very high, but there is no guarantee.

5. Hybrid Portfolio: These are portfolios with very good diversification to include more than one type of financial instrument. Based on the diversification the portfolio can be slightly more aggressive or defensive. Investors can also choose to include different return investments and to close existing investments according to their returns, changing economy and investment skills.

Robo-Advisors Help Investors Peek Behind the Curtain

When most people’s investment portfolios took a major hit following the 2008 subprime mortgage crisis, more than a few financial advisors wanted to send a robotic clone to tell clients their portfolios had lost value. Robo-advisors are now doing much of what financial advisors do – just not the dirty work of course.

In the new digital wealth management world, technology has empowered the individual investor, who can now choose between discount brokers, robo-advisors and/or human advisors. Robo-advisors provide automated portfolio management services – investment goals and risk screening, asset allocation and portfolio rebalancing – all with little or no human intervention.

This same technology has also caught more than one human financial advisor with his pants down as investment advisory services have become much more transparent. Wealth Managers, for example, continue to charge annual fees of around 1% even when a large portion of investments are managed through index funds instead of actively. But rather than displace financial advisors, using this same technology to streamline their own businesses has allowed some professionals to zero-in on what they do best while providing more transparent, less expensive investment advisory services for clients.

Fooling Some of the People Some of the Time

Wealth Management is a $5 trillion dollar industry and hidden investment fees are the shame of the investment advisory business, especially at old school brokerage firms. Even passive index funds may kickback a hidden 1% fee to a broker. These hidden fees reduce investment returns 1% a year or a whopping $17 billion, leading to as much as a 12% reduction in retirement income, according to a recent report on investment advice and retirement savings by the President’s Council of Economic Advisers (CEA).

Wealth management firms need to rebuild trust and relationships with the investment community. Those who have focused on client relationship building alone, however, have watched their clients jump ship for digital investment platforms. “Our research shows that firms that integrate digital tools into their business models will help strengthen these relationships rather than threaten them, and in fact help them attract the most lucrative investors,” says Owen Jelf, global managing director of Accenture’s Capital Markets practice.

Online investment services, including the robo-advisors, are forcing their human counterparts to be on top of their game. Big banks and brokerages in fear of once again becoming technology laggards (remember eTrade and the online trading revolution?) are moving quickly to add a robo-portfolio management option. At the very least, they’re adding comparable investment products and services, and of course there’s the pricing.

The advent of digital wealth managers is helping individual investors in three big ways:

Access to Professional Portfolio Services – Investors no longer have to pay high fees to obtain professional portfolio advisory services, nor do they have to compromise on quality. TradeKing – among the least expensive of the discount brokers – now provides personalized, automated portfolios on par with some high net worth wealth managers. At the same time, more wealth managers who used to snub anyone with less than $1 million in assets to invest are now lowering their minimum requirements and seeking out mass-affluents.

More Transparency – Investors can and should demand complete disclosure from financial advisors today. Since the mortgage crisis, individual investors have shown a very low tolerance for opaque financial transactions. Human advisors are under pressure to disclose as much information as robo-offerings, which are targeting/aimed at 75 million millennials who have grown up in a more transparent digital world.

Lower Fees – Robo-advisors charge fees that are often less than half of the 1% charged by typical investment advisors. A lot of independent advisors (who aren’t captive to big brokerage firms) are quietly lowering fees to compete with their digital counterparts.

Best of Both

All this new technology is exposing financial advisor practices and demanding more fee transparency. Still, it doesn’t mean robo-advisors exist to assassinate human advisors. In reality, robo-advice can complement human investment advice and save money in the process. Model portfolios cost less to construct and the savings actually helps clients to access other specialized advisory services such as tax advice, real estate investment or estate planning. Clients can have the best of both worlds using a package deal – robo-generated portfolios plus on-going highly personalized human financial guidance (at a much more affordable annual fee of .75%, as an example).

Money is Emotional, and Relationships Matter

Not all investors are ready to replace human interaction with algorithms. Money is and always has been, emotional. When someone dies, sells a business or gets divorced, turning to the robot doesn’t have much appeal. Real people want human interaction along with a personalized, customized investment plan. Not to mention a fiduciary relationship that a robot cannot offer. Individual investors are all for lower fees, but technology has limits. For example, a robo-advisor survey by the Wall Street Journal shows different robo-advisors produced different portfolios for investors with the exact same investor profiles.

More everyday investors will move toward some combination of human and online help to manage their investments and deal with serious life events that drive big financial decisions. Clearly, they will choose the investment advisors who offer full transparency. These innovations put individual investors in the driver’s seat.

How To Create Your Own Mobile Marketing Plan

Learning about mobile marketing can be very overwhelming, but just like anything else, it can also be very easily researched, learned, and applied. Now that you have found this list of tips, hopefully, you can come out a little more informed, so that you can refine your plan and become a great marketer.

Enhance your text messages with other forms of communication. Make use of multi-channel marketing. One form communication isn’t enough for today’s audience. Each style of communication has its own set of pros and cons. This is why it is best to use more than one. Try sending direct mail, e-mail and a text right before something important happens.

Only add telephone numbers from customers choosing to receive messages to build your database carefully. If you add telephone numbers of customers who have not elected to receive marketing messages, you are likely to see a high volume of complaints and requests to be removed from your list.

Understand that mobile marketing is necessary for your business. You need to have a direct method of communication with your customers, and this is an immediate way to do it. This is also a great way to truly understand what your customers are interested in, and how to cater to that.

Shop around for different companies. Mobile marketing companies all differ in their styles and methods. Finding the one that is best for your business and your customers can be as simple as visiting their websites. Never settle for the first one you find without checking out what the other companies may have to offer.

Be sure that you understand that a mobile site is not just a scaled-down version of your business, but it’s actually a summarized version. Many mobile marketers make the mistake of attempting to scale down their entire business and ultimately end up losing customers. You do not need to create two separate businesses here.

There’s no reason in the world why older media cannot make its way into your new marketing campaign. You’ll just have to rethink how this material is being presented to your customers. You’ll definitely have to think about streamlining it and making it shorter and a lot more poignant.

Because users will be viewing them on small screens, mobile advertising messages need to be brief, clear and express urgency. Every ad should focus on a call to action that tells the market to do something. Forgetting to include a call to action in your mobile advertising messages is a common mistake that beginners often make.

Make sure that any mobile apps your company releases deliver a service your customers want. If your app is something dumb or just duplicate information that could be found on your website, it’s just going to languish on the app store, unloved.

Like any other subject, the world of mobile marketing is vast and has a wealth of information available on it. Sometimes, you just need a little hint as to where to begin, so that you can get started. Hopefully, you have received that from the above tips.

Top 10 Email Organization Mistakes to Avoid

1. Stop Sending So Many Emails

Sometimes it’s much better to handle something in person or over the phone than using email. You should learn how to recognize such situations otherwise you may find yourself buried under replies to your emails. Generally, email is great for communicating well-formulated messages that require, at most, a simple confirmation. It’s much less suitable for extended group conversations where multiple participants share their thoughts with others.

2. Start Reading Your Emails Regularly

We know that the last thing you want to do before or after work is read work-related emails, but that’s how things have to be if you want to become an efficient email organizer. Depending on how many emails you receive every day, it may take just a couple of days or even hours for your inbox to start overflowing with new, unread emails. By reading your emails regularly, you ensure that the situation never gets too out of hand.

3. Start Checking Your Emails Throughout the Day

There’s no excuse for not owning a smartphone these days. Regardless of which email service you use, there’s a way how to make it work on all major mobile operating systems. Having your email on the phone allows you to easily read new emails throughout the day, which can drastically reduce the length of your scheduled email-reading sessions, the importance of which we’ve described in the previous chapter.

4. Start Using an Email Client

Web-based email services are great because you can conveniently access them from anywhere, even when far away from your own personal computer. But even the best web-based user interface can’t rival the features and convenience of dedicated email clients such as Outlook or Mailbird. Email clients are faster, can display emails from multiple email services in a single window, support keyboard shortcuts, come with powerful spellchecking capabilities, and are available for all operating systems and devices.

We’ve already mentioned Outlook and Mailbird, which are arguably the most popular email clients for Windows, but there’s also Airmail, an email client for iPhone and macOS by Italian company Bloop SRL, Postbox, a desktop email client and feed reader for Windows and macOS written and sold by Postbox, Inc., or Mozilla Thunderbird, a free and open-source cross-platform email client developed by the Mozilla Foundation, just to name a few available options.

5. Stop Subscribing to Newsletters

Websites and companies love email newsletters because they allow them to maintain engagement and sell products with minimal effort. While some newsletters are clearly valuable, most, sooner or later, end up being ignored. You may think that it’s no big deal to subscribe to a newsletter-after all, you can always unsubscribe later-but experience tells us that things tend to become unmanageable much quicker than it initially seems. We recommend you stop subscribing to all newsletters as a rule of thumb and use other communication channels instead to receive information from websites and companies, such as social media networks or RSS.

6. Start Using Multiple Mailboxes

Why have just one mailbox for everything when you can have several and use a different one for each of the things you do. You can start, for example, with one mailbox for work-related emails and one mailbox for personal emails. Some people like to take things further and use a privacy-oriented email service such as ProtonMail for potentially sensitive personal communication and a free and convenient email service such as Gmail for web services and online shopping. Another advantage of this approach comes in the form of better security. Having some degree of separation between various activities minimizes the impact of an email breach and gives malicious hackers less information to work with.

We know for a fact that spam accounts for 45 percent of all emails sent. We also know that about 14.5 billion spam emails are sent every single day, many being some form of advertising. To say that spam emails lead to a productivity loss would be an understatement.

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