Individually Managed Accounts

Individually Managed Account:  An account managed by an investment professional solely on behalf of that individual investor.

A few investors have always known about and sought out Managed Accounts. Simply put, they want to have their money in the market when it’s going up and either in a better place or out of the market when it’s going down. Preservation of capital in down markets is just as essential as capital gains are in an up market. Sometimes the best money you will ever make is the money you do not lose! There is no “one size fits all” for managed accounts. There are multiple methods and strategies to money management. The key is to find the right fit for the investor so they, feel comfortable, knowing that someone is watching their accounts and making the appropriate moves to achieve gains and minimize risk in a tactical and active sense, not in a “buy and hold” passive sense. There is no legal mandate that forces an account manager to keep your money in harm’s way if it is prudent to move it to a better position, or even remove it from the market altogether. It makes intuitive sense to have your portfolio treated with the attention it deserves.

A couple of things that Account Managers are not:

Market Timers. No one can, nor probably ever will. Trend and technical analysis requires market reversals to be apparent, therefore by definition, it’s noticed after the fact. Making a major move at the very moment of a market reversal is purely happenstance. Getting close to these points is easy. Hitting them spot on is an accident.

Stock Pickers. Run from these people and delete their emails. Some of the greatest managers engage in fundamental analysis of whether or not to purchase a particular stock or bond. This is a good thing. Listening to a cousin with a tip on the latest penny stock isn’t.

In short, if you qualify for an Individually Managed Account, it’s certainly worth exploring. The possibility of getting better return with less risk is real. No guarantees of course, and it doesn’t mean that there will never be a down day, month or quarter, or even a down year, but overall, if you compare the losses in the managed account world to the losses in the mutual fund world, the choice is pretty obvious. Likewise, most good account managers do pretty well in up markets too. For the real proof in the pudding, compare a 5 – 10 year period to see how they perform in all market cycles.