Many new investors find online trading as intimidating, but with modern technology and automated advisors, your tasks become much easier in understanding the core concepts of trading online.
If you are looking to invest in the market, receiving adequate information and doing market research is undoubtedly the first step that you should consider. And if you don’t consider this step, you will probably struggle to get things done throughout your online trading journey, unless you use a wealth manager like Pillar Wealth Management, LLC. who manages assets for clients with $5 million to $500 million to invest.
Your investment options can start as low as $25 a month, which you can gradually increase as you begin to understand the insights of every online trading process. But before we begin, you must first understand the logistics behind an investment company.
Would you rather have a wealth management firm help you manage $5 million or more of your liquid assets? Schedule your consultation call with Pillar Wealth Management, LLC.’s co-founders Hutch Ashoo and Chris Snyder to discuss how we put your goals first.
What is an investment company?
You may have heard about online trading from many sources, and experts always suggest that beginners invest using an established investment company. These companies provide a small investor a platform and offer various advantages of professional investment management.
An investment company allows you to invest your money to buy shares or units of diverse firms. When sold by that investment company, these shares can yield profit and help you expand your portfolio while also spreading your risk.
There are three major types of investment companies, which include:
- Open-end funds
- Closed-end funds
- Unit investment trusts
Let us elaborate on these types and help you understand each term better.
Discover how to select a great investment company by reading The Ultimate Guide to Choosing the Best Financial Advisor for Investors with $5 Million to $500 Million in Liquid Assets.
Open-end funds, or more commonly known as mutual funds are one of the most popular. These funds are accessible among small investors as they start at with minimal rates and offer high returns. It is a system where buyers can buy shares if they want to, which is why it is known as open-end funds.
In open-end funds, you buy and sell shares on their demand at their net asset value or NAV, which may increase or decrease daily. The calculations take place at the end of the day and are calculated based on the fund’s underlying securities.
An open-end fund is the low-cost and easiest way to purchase a diversified portfolio, which is why it has become one of the popular methods among beginners.
Some features of open-end funds include:
- It can have unlimited shares
- Open-end funds stick to net asset value price after each day’s end
- Managers fix a specific time for trading open-end funds
Closed-end funds are also referred to as investment trusts and work on the collective investment model that issues limited non-redeemable shares. It is somewhat like open-end funds but differs in some respects. For instance, you cannot create new shares to meet the investor’s demand, which is customary practice in open-end funds.
In a closed-end fund, you can buy or sell shares only in the market. These shares are traded to their NAV on the stock exchanges, and often at a discounted or premium rate depending on their net asset value demand.
Some features of closed-end funds include:
- You can trade the shares only on the stock exchanges
- The shares are available for trading at any time during the market opening hours
- After beginning operations, it closes the new capital flow
- Trades above or below the net asset value
Unit investment trusts
Unit investment trusts are investment funds that provide profits directly to the individual unit holders rather than reinvesting the dividend back into the fund. These trusts don’t have a board of directors like closed-end or open-end funds and offer an unmanaged portfolio of securities.
There are two main types of unit investment trusts, which include stock or equity trusts and fixed-income or bond trusts. Stock trusts provide capital appreciation and dividend income and have fixed termination dates, whereas bond trusts pay relatively consistent amounts on a monthly cycle until the first bond matures.
Some features of unit investment trusts include:
- Individual investors get their profits paid directly as unit investment trusts and don’t have a board of directors
- If you invest in UIT, you become the trust’s beneficiary
- Investors get an unmanaged portfolio of securities
By now, we assume that you have gotten some idea about an investment company and are ready to invest. Let us look at some of the best investment companies that are worth considering.
Now that you know about the types of funds out there, be sure to get your copy of our guide Improving Portfolio Performance: The Shifts Multi-Millionaires Must Make To Achieve Financial Security and Serenity from our team at Pillar Wealth Management, LLC.
What is the best investment company?
There are hundreds of companies that offer excellent returns, but we have listed five of the best out there.
If you are a beginner, this investment company has all the right reasons to start with, as you will only need $500 as your first investment. It is an excellent investment platform that manages your first $5,000 for free. This feature makes it one of the best low-fee automated investment companies for any first-time investor.
Wealthfront features include:
- Free financial planning
- 529 college savings plan
- Globally diversified portfolio
- Tax-loss harvesting
- Algorithmic investment strategies
- Low 0.25% management fee
2. Pillar Wealth Management
This list wouldn’t be complete without mentioning ourselves. We’ve done great work for our clients over the years, and plan to continue doing so. Our team here at Pillar Wealth Management, LLC. has a fiduciary duty to all our clients, we work 100% on fees, and we provide the highest level of service to our high and ultra-high net worth clientele.
If you would like to learn more about how we can manage your multi-million dollar investment portfolio, schedule your conference call with co-founder Hutch Ashoo and Chris Snyder today.
Webull is another profitable investment company that has a useful dashboard accessible from both desktops and mobile devices. The dashboard is integrated with the stock market and shows real-time updates, which allows you to learn the system and make the best investment decisions.
Beginners will love this company as it is affordable and charges no commissions. And the best part of all is that you don’t have to maintain a minimum balance to start investing. Their customer support is also excellent with 24/7 support in case you need help.
The signup process is simple, and all you need is a valid ID proof. With a user-friendly interface and a mobile app that will never disappoint you, Webull ticks all the right boxes and is worth considering.
4. You Invest by J.P. Morgan
If you follow investment news closely, then you have probably have heard of J.P. Morgan. This investment banking institution is one of the best in the industry. You Invest by J.P. Morgan is an app that comes from the stables of J.P. Morgan and offers a simple investing interface for beginners.
The account set up is simple and straightforward. The app requires no minimum balance, and you can start with a small amount. And as you gain confidence in the interface, you can invest more significant amounts with the Portfolio Builder feature.
This feature allows you to get more benefits and will help you in building your investment portfolio. Overall, it is a complete solution for new investors that want to start with a small amount in an investment company.
If you are a student and want to try investing, Acorns is the perfect platform for you. It comes with a user-friendly app that is easy to set up with few requirements such as bank account details and identification questions.
You can connect with multiple credit or debit cards for your purchases, and Acorns will handle all the investments automatically with its smart algorithm. The company also supports regular automatic deposits and comes with a low fee structure.
Overall, it is one of the best investment companies that offer investment options for students or beginners.
If you’re a high net-worth individual, many of the investment companies above may not be a perfect fit. Instead, review this book that we’ll send to you, titled The Art of Protecting Ultra-High Net Worth Portfolios and Estates: Strategies for Families Worth $25 Million to $500 Million.
Best investment management tips
Before making any purchase or investing in an investment company, you should consider these steps to ensure that you reap maximum results and don’t end up losing your money. These steps include:
1. Determining a personal financial approach
Before making any investment, it is always better to evaluate your financial situation. It would be best if you figure out your risk tolerance and goals before investing. Having a personal financial roadmap ensures that you have a planned approach towards your goal.
2. Evaluating risk tolerance
As you know, there is a risk factor involved in investments, so it becomes crucial to understand and assess your risk tolerance before you invest. You may gain or lose your money, which is why evaluating your risk tolerance is a crucial step before purchasing or investing in an investment company.
You don’t have to create an investing plan and evaluate your risk tolerance alone. If you are searching for a financial planner that manages clients with $5 million to $500 million investment portfolios, learn how Pillar Wealth Management, LLC. can help. Register here for a fre consultation with company co-founders Hutch Ashoo and Chris Snyder today.
3. Consider mixing your investments
The practice of diversifying investment returns with asset categories helps you to lower the risk of significant losses. It is always better to invest in stocks, bonds, and a mix of securities to stay on the safe side. As market conditions can upset you in one category, if you have investment diversity then at the same time you might also boost your other category’s profitability.
This practice will ensure that you get better investment returns even if your other category is losing value in the market.
4. Think before investing substantial amounts in shares of any individual stock or employer’s stock
Diversifying your investments always helps you to reduce the risks of investing. It is better to invest in multiple companies rather than having numerous assets in the same company. This practice ensures that your investments stay safe, ensuring fewer risks of sacrificing potential gains.
5. Start an emergency fund
Creating and maintaining an emergency fund is one of the best practices to avoid loss. It would be best to have some amount of money in savings to cope with emergencies.
6. Clear your credit card debts
Debts affect your ability to deal with the market conditions. If you have high-interest credit cards and owe money, it is only wise to clear all your outstanding debts as quickly as possible.
7. Implement dollar-cost averaging
Dollar cost averaging is one of the best investment strategies to lower the risks of investing. It would be best to ensure the perfect timing for your investments and follow a consistent pattern.
By following this investment strategy, you will invest at all prices and increase your holdings.
How to hire the best investment company near me?
Before you learn about how to find an investment company in your area, be sure to look at The Ultimate Guide to Choosing the Best Financial Advisor: For Investors with $5 Million to $500 Million in Liquid Assets, from our team at Pillar Wealth Management, LLC.
Hiring the best investment company is the most important step you can take to reach your investment goals. It requires some research and time before you end up with the perfect company that will take diligent care of your investments. These are some of the steps that you should consider before hiring a financial advisor.
1. Understanding the types
There are investment companies that offer a variety of investment plans. Some may provide financial planning services, while others are experts in investment management services. It would be best to evaluate your investment and risk tolerance before finalizing your investment company.
If you want to invest with a small amount looking for a company that offers low fees is the first thing that you should consider.
2. Use search engines
If you have trouble finding an investment company by yourself then opting for a Google search is the smartest thing you can do. These searches will ensure that you get all the best investment companies near you that have high investment returns and according to your criteria.
3. Verify credentials
Before investing in an investment company, it is always wise to do research on their performance. You can check their records on their website or look for reviews posted about their apps. This verification will ensure that your money lands on safe hands.
4. Look for frauds
Frauds are common in online transactions, which is why it becomes extremely important to invest your money with caution. It would be best to check the credentials of an investment company and do detailed research before investing.
Investing has probably become one of the best profitable investments in the market. The ability to gain high-returns has allured many people to invest in equities, bonds, ETFs, open-end and closed-end funds, which deliver desired results if approached with a planned roadmap.
If you’re considering investment companies and you have $5 million to $500 million to invest, let’s talk. Our team at Pillar Wealth Management LLC. can offer you a no-obligation consultation with company co-founders Hutch Ashoo and Chris Snyder.