Choosing the Right Investment Management Program: A Guide for Investors

Choosing an investment management program for most individual investors is easy to do. The way to do it is to find a mutual fund or other managed fund program that meets an investor’s financial goals and objectives. Most individual investors do not have the assets necessary to invest with large Wall Street type investment management firms. These include private equity and hedge funds. Most individual investors however can benefit from professional investment management on a smaller scale through managed programs and their 401(k)s.

Using Managed Funds

An investment manager in a mutual fund or exchange-traded fund (ETF) state their goals and objectives in the fund’s prospectus. The prospectus is a legal document that is required to be given to all investors. The prospectus is given in accordance with the Securities Act of 1933. The prospectus provides an investor with the information to determine if the investment manager’s investment style is in keeping with their investment philosophy and goals.

Other Sources for Choosing an Investment Management Program

Reviewing a prospectus and using Value Line or Morningstar ratings charts can help an individual investor pair down their choices and find the investment management program that is best for their needs. An individual investor may also use investment management software that is available commercially to help in the selection of an investment management program. The use of software may not be for every investor and for those just starting out, it may be just as simple to contact an online brokerage service such as T.D. Ameritrade and Charles Schwab (as examples) and sit down with a financial counselor for recommendations.