Investors who prefer active investing are aiming for alpha or outperformance that beats markets.
To help mitigate the risk of poor returns, they usually construct a portfolio of active managers. The only problem is these managers need to be carefully chosen since investors are best served by putting together experts with varying strategies and backgrounds.
Read: How to choose a fund manager
These active investors should also consider concentrated products. Read more on why this helps boost their returns.
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Passive investing is not 100% safe. So, it’s always best to help clients choose an approach that’s optimal rather than one that simply seems risk-free.
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A financial advisor’s business is a bit like a muscle building workout. A planner’s hard work may produces initial success and results, but they’ll inevitably hit a growth barrier.
Vik’s Pick: Most active funds aren’t active
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