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Quants Compete: A Financial Advisor That...
22 November 2021

Quants Compete: A Financial Advisor That Cares About Your Goals

Creating an effective financial plan can be complicated. Guidance, clear and concise goals, and the use of available technology are all factors that create a worthwhile strategy. Any worthwhile financial advisor brings these things to the table.
The services provided by a finance consultancy may vary depending on the type of professional hired. In general, a consultant will assess your current situation – including assets, debts, and expenses. They will then identify areas where improvements can be made.
In addition, the professional responsible for the project will ask questions about your goals and create a plan to help you achieve them.
There are two main factors when it comes to financial planning:

Regular or Ordinary Expenses
These are the expenses of every month: rent of work space, internet, employees’ salaries, taxes, invoices, etc. Any expense that you know is coming every month falls under this category.

Irregular or Extraordinary Expenses
Irregular business expenses include several examples, such as: salary readjustments for employees, fines for any delay in payments, unplanned maintenance, social gatherings on commemorative dates and damage to the work environment. Any expense that is unexpected falls under this category.

Bull and bear market strategies

A bear market refers to a general decline in asset prices of at least 20% from the most recent rallies. We never know what will happen in these markets, but fighting back can be dangerous.

  • Keep your fears under control

    Investors should always try to separate their emotions from the investment decision-making process. What looks like a massive global catastrophe may one day be remembered as nothing more than a speck on the radar screen a few years later.
    Remember that fear is an emotion that can cloud rational judgment of a situation. Keep calm and carry on

  • Use the average price strategy

    The most important thing to remember during economic turmoil is that the market has its ups and downs, just like anything in life. Nothing is consistently perfect. The market is no different.
    If you are a long-term investor (which means a time horizon of more than 10 years), one option is to take advantage of the mid-price strategy.
    When you buy stocks regardless of price, you end up buying stocks at a low price when the market is down. In the long run, your average price will decrease, leaving you with a better overall entry price for your assets.

  • Play dead

    During a bear market, pessimists “rule” and optimists don’t have a chance to fight back.
    Going dead in financial terms means placing a larger portion of your portfolio in fixed-income securities, such as certificates of deposit (CDB), Treasury Direct bonds, and other instruments with high liquidity and short maturities. That is, lower your market risk and increase your cash.

  • Diversify

    Having a percentage of your portfolio spread across stocks, bonds, cash, and alternative assets is the core of diversification.
    How you divide your portfolio depends on your risk tolerance, time horizon and objectives. Each investor’s situation is different. A proper asset allocation strategy will allow you to avoid the potentially negative effects of putting all your eggs in one basket.

  • Invest only what you can lose

    Investing for your future is important, but keeping yourself and your family fed is non-negotiable. It is not advisable to take short-term funds (i.e. money for mortgages or groceries), and invest them in stocks.
    As a general rule, investors should not get involved in equities unless they have an investment horizon of at least five years, preferably longer, and should never invest money they cannot afford to lose.

  • Look for good values

    Bear markets can offer great opportunities for investors. The trick is to know what you are looking for. Underpriced Mistreated Assets: These are all stock descriptions during a bear market.
    Value investors like Warren Buffett often see bear markets as buying opportunities because valuations of good companies are affected by the account of “bad” companies and their value becomes very attractive.
    Buffett often builds his position in some of his favorite stocks during the market’s less buoyant periods, because he knows the nature of the market is to punish even good companies for more than they deserve.

  • Take stock of defensive industries

    Actions defensive and non – cyclical securities that are generally exhibit better performance than the overall market in bad times.
    These types of stocks provide a consistent dividend and steady earnings regardless of the general market state.
    Companies that produce non-durable products for home use like toothpaste, shampoo and shaving cream are examples of defensive industries, because people still use these items in tough times.

  • Bet on falling prices

    There are ways to profit from falling prices. Short selling is one way of doing this by borrowing shares of a company or ETF and selling them hoping to buy them back at a lower price.
    Short selling requires margin deposits and can cause detrimental losses if markets rally and short positions are triggered, putting further pressure on prices.
    Options are another choice, which gain value as prices fall and guarantee a minimum price at which to sell a security, effectively putting a floor to your losses if you are using it to protect. You will need to trade options in your brokerage account to buy puts.

  • Patience is Key

    A Bear Market creates anxiety and fear. Bull market exaggerations are corrected and investors are left with great pessimism. Generally, this is the best time to increase exposure to the equity market, as long as this is done carefully.
    To invest wisely, it is recommended to diversify and invest according to your investor profile. Otherwise, the investor is seized by anxiety and their senses are affected by feelings of fear or greed, which replace rational thinking. Controlling one’s emotions is critical when it comes to investing. Be willing to accept that there are wins and losses when it comes to investing, and let go of the things out of your control.

Financial Goals

The success of any business depends, in part, on how its finances are managed. The resource planning involves having clear goals and develops strategies on how to use them in the best possible way.
This ensures that you not only meet short-term goals, but also long-term growth and expansion goals.
Many entrepreneurs believe that they can take care of their organization’s financial problems themselves, saving the costs of hiring an expert. Finance is a complicated sector and one that requires counseling to succeed. This is where the role of a competent financial advisor comes in.
This professional has the skills and experience to provide solid financial advice, manage your taxes, and generate a maximum return on your investment.

Lending a Hand
If you run your own business, you’re probably filling a variety of roles. entrepreneurs find themselves at the helm of various departments in the company – such as product development, marketing, quality assurance and customer support.
They are the ones who will think about what news to put on the market, how to promote your brand, and how to give customers a satisfactory experience when dealing with your product or service. Entrepreneurs in this situation know how valuable time is. This is the primary reason to hire a financial advisor. Hiring someone to take care of your finances can create a peace of mind that is difficult to attain elsewhere.

Specialized experience
It is possible that a non-business professional can gain knowledge of financial matters by educating himself, but his actions will still not match the experience provided by a real expert. Legitimate financial advisors have extensive training and experience working in the field of finance.
The experience of these professionals is priceless when it comes to your finances. By assessing your business practices they’re able to suggest optimizations based on industry standards. A true professional will never mismanage your resources and will always use them to generate maximum return.

Understanding of future plans
Business owners are often caught up in the day-to-day monotony that all entrepreneurs find themselves in, forgetting to look at the bigger picture and think about their long-term goals. A financial advisor will ensure that you have a clear vision for the future and that the business is headed in the right direction in terms of stability and growth.
They can make predictions for future performance based on various financial indicators such as market conditions, technological developments and changes in competition, in addition to predicting the likelihood that the business will achieve its objectives. That way, you’ll know if your strategies are working or if specific changes are needed.
It can also help you make investment decisions by projecting whether a new product or project is likely to be profitable.

Cost cuts
Since financial advisors are focused on making the best use of available resources, they are determined to cut costs wherever possible, while also keeping waste to a minimum.
They can help you develop an accounting system to track expenses. Once you have this system in place, you will be able to identify any major changes in spending on a periodic basis, allowing you to take action as quickly as possible to ensure costs fluctuate within your budget.

Financial feasibility study
Most people who seek this service are entrepreneurs whose primary goal is to obtain guidance. They understand the basics and why planning is crucial to success in the market, but they just need to be “shown the ropes” from a professional. This guidance is paramount to financial goals being met in a timely manner.

Financial analysis and structuring
Entrepreneurs who have problems related to expenses, difficulties in calculating profits and cash imbalances, should seek help to gain advice to gain a better understanding of their financial reality.
Among the main concerns of these entrepreneurs includes, but is not limited to:
Obtaining useful information for decision making, cost reduction, expenses and cash balance, and general upkeep.
Experts in financial analysis and management are crucial to the success of any business.
The project’s advisory team must organize the accounting documents so that the client’s expenses can be structured and classified. It is necessary to do this to analyze the company’s financial potential, through the use of indicators. For this, it is necessary to have in mind the objective of finding ways to improve the calculation of profit.

Business plan
Companies that are in the process of buying and selling, or are looking to invest should consider having a business plan created.
The main goal in this case is to get a thorough understanding of the company’s capital structure as well as its historical results. In this way, it will be possible to arrive at an accurate appraisal.
Through analysis of historical data, the team in charge should access macroeconomic assumptions and information on the sector in which it operates. In other words, establish the value of the analyzed company, using consolidated methods.

Conclusion
All in all, financial analysis is a standard in any business that is worth its weight. No matter how disciplined of an entrepreneur you are, you can’t handle all aspects of your business. Leave the finances to an expert.