Voted #6 on Top 100 Family Business Influencers, most influential expert on Wealth, Finance and Investments: Jacoline Loewen LinkedIn Profile
Showing posts with label wealth management. Show all posts
Showing posts with label wealth management. Show all posts

August 15, 2016

Canoes, Housework and Hedge Funds

It’s that time in the summer to get in a canoe and head out across the lake.  How much more enjoyable when you know as you paddle peacefully, your wealth is organized securely for the long run?
Business owners have generally built their wealth by excelling in their chosen fields rather than through any particular investment expertise. While many of these self-made millionaires understand the importance of saving and investing for the long run, recent research by UBS Wealth Management Americas discovered that some have limited financial acumen on specific concepts and terminology.
For example, three out of ten understood the term “basis point” or “beta”. Six out of ten understood market capitalization. Seven out of ten understood liquidity.
What’s more, these self-made millionaires choose not to learn more about investing. The UBS Wealth Management research noted that these entrepreneurs rank researching and managing investments dead last on a list of how they choose to spend their time, even behind housework.
The millionaires cite information overload as one of the reasons for their disinterest. For example, researching hedge funds could leave entrepreneurs confused as they have a controversial history since they began to grow in popularity after 2001. Yet the traction of investing in specific hedge funds lies in their flexibility to pursue strategies not open to mutual funds or segregated funds. Having your own hedge fund or being part of a pool can bring a unique advantage. In addition, research on hedge funds will show that it would be too difficult to replicate the strategies as an individual investor because they would be prohibitively expensive and logistically impossible. What a pity to miss out on a valuable investment opportunity because of lack of expertise.
Ultimately, millionaires generally recognize their constraints and choose to work with a financial professional.
What does build confidence for these business owners? Our research shows it is the principle of financial discipline: setting specific objectives, developing a plan and sticking to it.
With your financial plan done and working with a UBS financial professional, you can have the peace of mind to get in the your canoe and relax on the lake this summer.
For more information on the UBS Wealth Management Americas survey, to request the full research report, or to find out more about UBS financial advisors - please feel free to contact me.
Jacoline Loewen is director of business development of UBS Bank (Canada). She is also author of Money Magnet: How to Attract Investors to Your Business. You can follow her on Twitter @jacolineloewen.