The Investment Management Process: 5 Steps | Royal Oak Financial Group (2024)

March 01st - 3 minutes to read

If you’re ready to begin investing, here are five steps to help you become familiar with the investment management process.

Before making any investment decisions, you want to find a financial advisor who can help you with investment planning and portfolio management. That way, you can work together to perfect a personalized investment strategy to fit your current financial situation, risk tolerance, and future goals. Keep reading to learn about the five steps in the investment management process in Worthington, OH.

The Investment Management Process

Here are five steps to help you become familiar with the investment management process. Please consult legal or tax professionals for specific information regarding your individual situation.

1. Set Investment Goals and Objectives

The investment management process begins with planning. You’ll want to spend time with your financial advisor discussing your long-term and short-term goals, both financial and non-financial, so they can help build a portfolio that fits those goals. It’s essential to understand the role that your investments will play in your current and future cash flow and to take into account the long-term nature of successful investing.

2. Determine Risk Tolerance

As an investor, you should know that rewards almost always come with some degree of risk. You’ll want to find out where your risk tolerance level falls so that you can set boundaries and align your tolerance level with your investment goals. Assessing your tolerance level will also help your financial advisor understand how much loss you’re willing to handle and how comfortable you’ll be maintaining your current investment positions if the market experiences large declines.

3. Determine Asset Allocation

Once you’ve categorized your risk level, you can begin determining asset allocation for your portfolio and identifying which specific investments you want to be exposed to and in what amount. During this process, you’ll work with your financial advisor to decide how you want to diversify your portfolio among different types of investments, or asset classes. These classes may include real estate, cryptocurrency, stocks, bonds, mutual funds, and more.

4. Building Your Portfolio

Using the assets and investments you allocated, your financial advisor can now assemble an investment portfolio suited to your goals and the investment horizon.

5. Monitor, Report, and Update

After implementing your portfolio plan, it’s essential to keep an ongoing review of its performance to ensure that you’re on track with your investment objectives. Your financial advisor will keep an eye on your investment plan and its progress and let you know if any changes are needed. It’s important to review investment performance with your advisor regularly to determine if there have been any significant declines or if the portfolio needs to be rebalanced.

It’s essential to choose an investment advisor who understands your financial situation and aligns with your banking philosophies and goals. At Royal Oak Financial Group, our Certified Financial Planners and investment banking professionals are here to help you achieve financial success and create a balanced formula that fits the needs of your unique circ*mstances and goals. Reach out to our team today to get started with your investment portfolio and the investment management process.