A lot of individuals look at the securities
market and the policy market with either equal suspicion or equal enthusiasm.
However, it takes the expert advice of a financial expert like Eric
James Viveros to explain what would be the appropriate option for
someone. It is not easy after all to understand what policy providers are up
to. The stock market offers a different investment option as opposed to the
insurance option. There is a difference in the very basics of each of these
financial instruments, apart from others like mutual funds, bonds and
commodities. Who should invest in each of these and when is something that
needs good understanding of the markets.
Financial
services consultants can advise individuals on where to invest and how
much. For example, it would be a bad idea to put all your eggs in one basket.
In other words, if you have allocated 25% of your income for savings and
investments, it wouldn’t be wise to use all that to pay premiums for insurance.
There are policies that promise assured amounts after maturity and those that
only offer coverage during the specified term after which the policy expires and
you don’t get anything back.
There are policies that offer
returns based on how the investment component performed in the market and how
much the fund managers were able to make out of it. Each of these depends on
market conditions as well as how the policy provider makes use of your money.
The fine print of the policy often has pointers that are ignored by policy
owners. The promised returns are obviously misleading too, unless they are from
reputed companies.
Investment in stock comes with
its own risks. A good financial adviser
can help you pick the right time, right stock and right markets to invest.
Whether you invest in the commodities market or the Forex market, you have to
make sure you understand their workings, patterns, trends and probable
direction of movement. Some invest in stock while some invest on riskier
options. However, how you invest and how much you invest is in your hands and
the returns solely depend on your reading of the market.
While insurance offers the
benefit of risk coverage, stock investment could yield high returns in a very
short time. Income planning needs
you to consider both short term and long term effects of your investment and
plan accordingly. While short term gains are important, covering risk is
equally important. Allocating a part of your money to stock will let you make
the most of positive market movements.
Consultants can also help you
pick a couple of good policies that offer life and health coverage. That will
ensure your finances will not be thrown off the track due to unforeseen events.
In other words, the balance between insurance policies and securities investments should be maintained based on how your
liabilities are changing along with your responsibilities and at what stage of
your life and career you’d need to take these decisions.