02-15-2018 Columns

Is a managed account right for you?

As an investor, you’ll face many decisions over the years. How much should you invest? Where should you put your money? When is it time to sell some investments and use the proceeds to buy others? Some people enjoy making these choices themselves – but not everyone. Consequently, the type of investor you are will influence your thinking about whether to open a managed account. As its name suggests, a managed account – sometimes known as an “advisory” account – essentially is a portfolio of stocks, bonds and other investments chosen by a professional investment manager who makes the buy and sell decisions. Typically, each managed account has an investment objective based on your goals, and you may have some voice in investment choices – for example, you may be able to request that the manager avoid certain investments. Or, you might still work with a personal financial advisor who can help you identify and quantify your goals, define your risk tolerance, and track changes in your family situation – and who can then use this information to help guide the investment manager’s choices. Beyond this basic structure, managed accounts can vary greatly in terms of administration, reporting, fees and minimum balance. So, assuming you meet the requirements for a managed account, should you consider one? There’s really no one right answer for everyone. But three factors to consider are cost, control and confidence. Cost – Different managed accounts may have different payment arrangements. However, it’s common for a money manager to be paid based on a percentage of assets under management. So, if your manager’s fee is 1% and your portfolio contains $100,000, the manager earns $1,000 per year, but if the value of your portfolio rises to $200,000, the manager earns $2,000. Because the manager has a personal stake in the portfolio’s success, this arrangement could work to your advantage. Be aware, though, that other fees may be associated with your account. Control – With any managed account, you will give up some, or perhaps all, of your power to make buy-and-sell decisions. If you have built a large portfolio, and you’re busy with work and family, you may like the idea of delegating these decisions. And, as mentioned above, you can still oversee the “big picture” by either working through a financial advisor or, at the least, having your goals, risk tolerance and investment preferences dictate a money manager’s decisions. But you will have to decide for yourself how comfortable you are in ceding control of your portfolio’s day-to-day transactions. Confidence – It’s essential that you feel confident in a managed account’s ability to help you meet your goals. And the various elements of a managed account may well give you that assurance. For example, some managed accounts include automatic rebalancing of assets, which, among other things, can help you achieve tax efficiency. Other features of a managed account – such as the experience and track record of the manager – also may bolster your confidence. Ultimately, you’ll need to weigh all factors before deciding whether a managed account is right for you. In any case, it’s an option worth considering. This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Career and Technical Education month

February marks Career and Technical Education month. Career and technical education programs, or CTE, help prepare high school and community college students with the knowledge and hands-on experience necessary to succeed in careers in a broad range of industries. We know that in a globally competitive economy, workers must be prepared for skilled professions. Yet, according to the Manufacturing Institute, 84 percent of executives agree that there is a talent shortage in manufacturing here in the U.S. including talent for front-line work jobs. CTE ensures that competitive and skilled workers are ready, willing, and capable of holding jobs in high-wage and high-skill career fields such as science, technology, engineering, art and design, mathematics, nursing, health care, construction, information technology, and much more. As such, in 2017, I joined my U.S. House colleagues in voting to pass the Strengthening Career and Technical Education for the 21st Century Act. This bipartisan bill will help folks develop the skills they need to compete for these in-demand jobs. More specifically, it reforms, modernizes, and reauthorizes the Carl D. Perkins Act. Since 1984, this legislation has provided federal support to state and local CTE programs. In order to support and grow a talented workforce, and Michigan’s middle-class, we need to continue to support and grow CTE programs that help countless students succeed now and into the future. To learn more about this and other important legislative issues, please visit my website: upton.house.gov or call my offices in Kalamazoo (269-385-0039), St. Joseph/Benton Harbor (269-982-1986), or Washington, D.C. (202-225-3761).

Free winter fishing this weekend