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How did you decide which part of investing you would get into?

I heard that there are all different types of investing including stocks, bonds, and other things (actually I’m not exactly sure what). Could you please tell me what part of investing you do personally, and how you picked that type of investing? If you have moved from one type of investing into another, please let me know how hard that was. (What happens if I pick the wrong type of investing to start - will I hate my job forever??) #finance #financial-services #investment-management #investing

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Eric J.’s Answer

Great question!


I started with Fidelity Investments, in 1997. As much as I would like to say I decided what area I got into, it was much more a situation where I had exposure to all types, and found certain ones more comfortable than others. My role now, as an advisor, is about selecting investments for my clients that will help them achieve their goals, with the highest probability of success that I can. As a result, I use primarily mutual funds and etf's, as the diversification in those products allow a greater amount of control, in terms of achieving the successful outcome I am hoping to achieve. Some advisors use stocks, others use complex option strategies...but I like to be boring. Why? My clients money, and the goals they are pursuing, are all that matter to me, so whatever I can use to get there, with the lowest amount of risk possible, I will do.


I hope this answered your question. I have been doing this for nearly 20 years, and will do it for the rest of my life. It's a fascinating industry, that is always changing, and gives you the ability to make a direct impact in the lives of your clients.


I wish you all the best,
EJW

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Jayasheela’s Answer

I decided to get into index funds due to a variety of reasons:
1. It offers high diversification (which lowers risk) even by picking a single fund
2. It offers very low costs as compared to actively managed funds (and fees eat into a lot of returns when compounding works its magic)
3. It's a quick decision to make and take action on. You don't have to spend too much time agonizing on which fund to pick. Once you decide on a stock/bonds and national/international mix, the actual fund can be decided mainly on the basis of costs/fees (Vanguard and Fidelity offer some of the lowest cost index funds).


If you are willing to invest significant amount of your time, there might be more niche areas you can look into. But index funds won't steer you wrong (you might not make spectacular returns but you won't suffer huge losses too) and can be optimized for your risk appetite by changing the stock/bond ratio etc.

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Vinodkumar’s Answer

Hello Henry,

It all depends on your risk taking appetite because the Reward is directly proportional to Risk.

For beginners, I will always suggest to start with small capital and have safe (low risk) instruments like equity fund, balance mutual fund, liquid fund, etc. Once you start getting the exposure and experience of the market and better understanding of how things work eventually you can start thinking in investing in large cap /blue chip stocks.

Hope this is helpful. All the best!

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