Statistics has helped to show that only a few control the money, while the larger population help these few make more money.

But how do this few people get more wealthy while the rest of the populace remains poor? The answer to this question is not farfetched – they never stopped investing. The rich put their money in every company that looks promising and profitable for them.

Now that the secret to wealth is known to you, and your thought has started going towards the business of investing, it is important that you get acquainted with the necessary knowledge that will make you become a great investor – just like the Oracle of Omaha, Warren Buffet.

A newbie investor is generally not advised to invest without assistance. The industry is too complicated, and anyone with insufficient knowledge about the technicalities involved in investments might watch the entire hard earned fund go down the drain.

The complexity that is involved in investing is the main reason why we have investment companies. They are primarily established to help investors put their money in the right companies. Through their competent and experienced teams, they will assist the investor to create a portfolio (buying more than one securities for a single investor) that will hedge against an investment that is not performing up to expectation, or that is totally failing.

The investment companies, therefore, are the "big brother" that watch a young investor back. Most of the potential loss that could have been faced by the newbies would be largely prevented.

As much as the investment companies have these huge roles to play for profit to come out from an investment engagement, there are some things that must be known by a newbie before finally deciding to invest with an investing company.

WHAT YOU NEED TO KNOW

WHO MANAGES THE FUNDS?

It is necessary that you get familiar with the team that manages the investment in those investment companies that you have considered. Your final selection should consider past investment that has been managed by these team. How have they fared with other funds which they managed in the past? How much experience do they have compared to others in the kind of securities you want to invest?

Knowing the team in the investment company is important because the growth or contraction on your fund will depend on how well your money is managed. The rule of the thumb is to choose the investment company that has the best fund manager in term of generating returns.

HOW DO THEY SELECT THEIR INVESTMENT PRODUCT?

It is imperative for all newbie to know how an investment company selects their investment products for clients before deciding on the one to invest with. The core question to ask here should be, "can you select the investment product that interests you, or are you going to be limited to what the company offers you?

Some investment companies have some specific product they invest in, while others invest in different products based on the instruction of their client. In this regards, you might want to know the policy of the investment company regarding this matter – especially if you intend to have some specific securities in your portfolio.

FEES REFLECT QUALITY

Every rational human is cost shy but quality friendly; this should not be the case when you are trying to invest with an investment company. This might not sound new or surprising, but there is a need to stress the fact that most investment which charge higher fees perform better in terms of picking securities that best fit the preference of their clients.

This does not mean that an investment company that charges less will not deliver a good service, it is just that the newbie investor, especially, is more likely to get an investment advice that is not subjected to a rigorous analysis. Except for investment companies that uphold the standards of best practices, the most investment advisor in some investment company ranks their client based on their revenue contribution to their firm.

A newbie that wants to invest with any investment company must analyze the fee to services rendered. If you are to use an investment company that charge a lesser amount at all, ensure you analyze the quality of services they have rendered in the past – this will save you and your money.

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