One solution is to trust professional companies in the field of investment. But how to choose the right investment company - Andrey Grunichev, CEO and co-founder of Finin-K LLC, speaker at the Investment Leaders-2023 Forum, spoke about this.
Investments have long ceased to be the prerogative of large businessmen. More and more citizens are choosing this financial instrument to increase capital. Investing can bring more than ordinary bank deposits. But without experience and knowledge, a novice investor can easily lose money.
Investment companies help the client to create a high-quality portfolio, selecting potentially profitable projects with minimal risks. The areas of their work are extensive: some promote the financing of small businesses, others offer to invest in real estate, and still others offer to purchase stocks and bonds. It is always better to distribute capital among different assets. Diversification will compensate for losses and increase the chances of high profits.
So how do you choose the right investment company?
1. Registration documents
The company must have the necessary permits, licenses and not be in the process of bankruptcy or reorganization. You can learn more about the company through state registers. If you are contacting a broker, check the validity of his license on the Central Bank website. Remember that the broker must be a member of a self-regulatory organization.
2. Agreement
Now, to conclude an agreement with many investment companies, it is enough to put a checkmark on the website or send an SMS with confirmation. This does not relieve the investor of the importance of studying the document, even in electronic form. Pay attention to the conditions (they should be transparent and understandable), the company's liability, the withdrawal period, the terms of termination of the contract and the risks.
3. Financial indicators
The success of a company is determined by the results of its work. Conscientious market players do not hide financial indicators, as well as the current number of investors. If a company has many clients, it means that it is able to provide them with high profits.
4. Profitability
Each investment company promises its clients good profits, but this information should be treated with skepticism. If you are guaranteed an income much higher than the market – this is a cause for concern. Pay attention to the age of the company. Fly-by-night organizations can attract investors with attractive conditions in order to disappear with money. Profitability must be justified, and the investment product must be understandable and stable.
5. Risks
Any investment is a risk. If you are not told anything about the risks, this information is hidden, then there is a reason not to trust such a company. It is another matter when the company initially declares the risks and talks about the mechanisms for controlling and reducing these risks.
Diversification (investing in shares in different companies/instruments) and high-quality selection of companies/instruments are the 2 key parameters for working with risks.
And the result of the investment portfolio at the end of a long period (at least 1 year) shows the final efficiency, including the ability to level out risks.
6. Company website
Large investment companies care about the appearance of the site, because this is the first thing their potential client sees. If you are greeted by a page with a strange design, and the last entry dates back to last year – then the attitude to the investor will be appropriate. The website of a professional investment company should describe in detail the direction of its work, potential profitability and terms of the contract. It is desirable that it helps you get answers to all your questions without calling the hotline.
7. Reviews
The recommendations here are standard: give preference to trusted resources where only registered users can leave comments, and the possibility of cheating is excluded. Of course, you should not form an opinion about an investment company only on the basis of reviews, but you cannot ignore a barrage of negative comments either.
8. Trends
In recent years, the crowdfunding market (the market for joint investment) has been developing very intensively. This niche provides a very easy (all actions are online), affordable (from 1 thousand) and reliable investment (the activity is licensed by the Central Bank, and the platforms work with risks).
Summary: there are many investment companies. Therefore, it is important for the investor:
- take some time to study companies (taking into account the above recommendations);
- choose a few of the best;
- invest small amounts first;
- and, after a certain period, having gained experience working with companies, decide on investing more significant amounts.