If you’ve ever wanted tips from a legendary investor but weren’t sure where to turn to, you’re in luck. Finance guru Mark Wiseman, the chair of the Alberta Investment Management Corporation (Aimco) is here to help. Since working with some of the top financial institutions in the world, Wiseman has the knowledge and know-how to give you the financial advice you need.
From navigating a financial crisis to securing the best interest rate on a mortgage loan, here are some of the top financial tips from Wiseman himself.
Look at the RMBS Market.
An RMBS (residential mortgage-backed securities) is a form of debt-based security. Wiseman advises investing in RMBS since they can easily increase profits and decrease credit risk to the investors. However, if there isn’t a proper structure, an RMBS can post a higher-than-average risk level. This is why poorly structured RMBS contributed to the 2008 housing crisis. Though the RMBS market has since bounced back, it’s important to invest wisely. One of two sources can develop an RMBS: Fannie Mae and Freddie Mac, and both organizations are regulated by the U.S. Federal Government.
Don’t overextend on a mortgage.
If you’re a first-time prospective homeowner, it’s not enough to know your credit rating as a mortgage borrower. You also need to understand your precise limits or you could negatively impact your cash flow. The United States real estate market is still rather volatile so your mortgage obligation needs to be built on a consensual relationship with your lender. Mark Wiseman also advises that you read up on the Government National Mortgage Association (Ginnie Mae), an organization that guarantees timely principal payments on mortgage-backed securities (MBS). Since COVID-19 has stifled economic growth, it’s important to know your limits when it comes to a mortgage.
Always plan ahead.
As an investor, you have to be one step ahead of the market. This means that you have your finger on the pulse of Wall Street in New York. Planning ahead with your investment portfolio can make a major difference, especially if you have a knack for understanding how economic policies may ebb and flow. This is critical for long-term sustainable growth, whether you’re looking at the agency RMBS market, the securities industry, corporate bonds, or real estate. You don’t need to be a Chief Executive Officer or Senior Managing Director to keep your portfolio facing forward.
Build yourself up gradually.
As a former analyst, Wiseman knows that many would-be investors tend to jump the gun. When it comes to your original nest egg, you need to build gradually. If you’re expecting rapid growth, you could saddle yourself with a prepayment risk or offset your value ratio. Market participants who are overeager don’t always get a higher yield. Sometimes, this may even put your investments into a recovery period after a risky move or two.
Keep your emotions out of it.
If you’re ready to be an investor, you need to work with your head, not your heart. It’s a work policy that will help you leverage any pool of loans, investments, or exchange commission to your ultimate benefit. When you avoid the urges that lead others to make risky mistakes, you’re better positioning yourself to succeed. Wiseman advises that you don’t let your gut drive your actions as an investor. Otherwise, you could lead yourself to a financial crisis in the long-term.
Becoming a smart investor takes time and effort, something Wiseman knows all-too-well. If you’re going to succeed, you need to follow some key tips. In the last year alone, especially in recent months, COVID-19 has upended the financial sector. Invest smartly, follow your head, and work to manage risk. This will help you prepare for financial success.