Financial Advisor: steps to manage your investments

Managing investments independently may seem like a daunting task, reserved only for the great financial experts. In reality, with the right knowledge and a proper strategy, anyone can learn how to manage their money effectively and achieve their financial goals.
I decided to write a short guide precisely to take you through the five basic steps to manage your investments like a pro, providing details, tips and insights for each step.

Creating a put-and-take account: the solid basis for your finances

he first fundamental step is the creation of an account, which I call ‘put-and-take’. This is an account that will serve as the basis for your daily finances, where you will deposit your salary and pay your bills, expenses and rent.

You have a variety of choices in deciding what type of account to open. Current accounts provide flexibility and immediate access to funds with online services and debit cards. Deposit accounts offer higher interest rates and are ideal for specific savings. Online accounts have low fees and advanced financial management tools.

I recommend saving three to six months’ net salary in this account to cope with unforeseen events. For example, if you earn €500 per week, your goal for the put-and-take account should be €1,500 to €3,000.

Starting to invest: the first steps towards growing your capital

Once you have established a stable put-and-take account, you can move on to initial investments that should generally be low-risk, such as bonds and mutual funds. These instruments offer a lower return than others, but also provide greater security for your capital. The objective at this stage is to protect the invested capital and to obtain a steady return over time.

Systematic investing: the discipline for long-term success

When you are familiar with initial investments, you can start investing in a regular and planned manner. This means setting aside a certain amount of money each month or quarter to invest in stocks, mutual funds or other financial instruments.

Investing regularly maintains discipline and reduces the impact of short-term fluctuations. The weighted average cost buys more shares when prices are low and less when they are high, reducing the average cost per share. The compound interest effect accelerates capital growth as your investments earn interest on interest over time.

Investing strategically: balancing risk and return

As you gain experience, you can take a strategic approach to investing, diversifying your portfolio across asset classes such as stocks, bonds, real estate and commodities. The goal is to balance risks to maximise returns over the long term.

Diversification also extends to economic sectors and geographic areas to mitigate negative impacts. Asset allocation should reflect your risk tolerance and financial goals, with periodic re-evaluation to maintain alignment. Remember that diversification does not eliminate risk, but reduces it, and invest only what you can afford to lose. Long-term investments require patience and discipline to navigate through market fluctuations.

Speculative investing: for experienced investors with a high risk profile

The last stage of investing is speculative investing, which involves higher risk but also offers potentially higher returns. It includes options, futures and margin trading. It is reserved for experienced investors and requires a thorough understanding of the risks involved. Before proceeding, it is essential to carefully assess possible losses and invest only what you can afford to lose. Managing investments requires commitment, discipline and knowledge of the financial markets.

By following the steps described, one can become an informed investor. It is important to remember that there is no one-size-fits-all approach to investing and that planning, diversification and discipline are key.

An experienced financial advisor can be a valuable support in achieving financial goals. This professional offers personalised financial situation assessments, assistance in choosing investments, constant monitoring and tax planning. In addition, he or she provides emotional support and helps make rational investment decisions.

Planning, diversification and discipline remain key, and a financial advisor can be a valuable resource in achieving these goals.