The asset management service has been on the market for a long time. Previously, asset management companies (AMC) independently formed a portfolio, filling it with various financial instruments. Their role was played by stocks, assets of the stock, foreign exchange and commodity markets, indices, real estate, securities, as well as government bonds of different countries. Nowadays, crypto assets have been added to this list, which shows good profitability and delight with a variety of choices.
The main question that worries investors is how and where to find a reliable and experienced asset management company that is able to successfully manage a portfolio, steadily increasing profits even with long-term cooperation. In this article, we will look at the main criteria for selecting such a company, and also list the signs of potentially fraudulent schemes with a high risk of capital loss.
Who you shouldn’t work with:
- “Successful” trader who requires the transfer of funds/assets to their wallets. If a trader who does not have a website, but only a telegram channel promises mountains of gold, but at the same time requires the transfer of funds or assets to his wallets, then you are a fraudster who plans to seize your funds, and not increase your capital. Most often, this is a fake trader with fictitious regalia, artificially inflated subscriber numbers, as well as newly created channels for attracting potential victims. After receiving a sufficient amount for management, such a “trader” stops communicating, and one can forget about the lost investments forever.
- A company that requires the transfer of funds/assets to their wallets. Everything is very similar to the first option, but in this case, the company has a license issued by the financial regulator of some exotic or offshore jurisdiction (for example, the Cayman Islands), a website, and even service packages. But if the same requirement is put forward to transfer funds or assets from the investor’s wallets to the company’s wallets, bypass such offers.
- Crypto projects that promise high profits. Various projects with colorful websites offering a generous commission for the attraction (referral program), as well as the purchase of “investment” packages of different prices in exchange for annual profits from trading or “mining” of cryptocurrencies in the amount of 100 +% per annum are potential scam projects … All of them work on the principle of the Ponzi pyramid, where income is paid to earlier participants from the contributions of newly arrived “investors”. When the flow of new participants dries up, payments stop, and the organizers of the project disappear in an unknown direction with investors’ money.
- Having a website with a sound trading strategy, tactics, and tools. Experienced companies always inform investors how and with what tools they are ready to make a profit, while they do not promise xx in a short period of time.
- API management. Qualified AMCs manage crypto assets only using API keys. The investor himself chooses the trading platform, generates an API key, and transfers it to the company with the rights to conduct transactions, but without the right to withdraw funds. Thus, the investor continues to control his own assets, observe the growth of profits, and does not worry about the theft of his funds.
- No freezing of funds for a certain period. A number of investment or hedge funds, some crypto exchanges, etc. when transferring assets into a trust, a so-called freeze period is established or they simply block the withdrawal of a number of assets for some time (a quarter, half a year, or a year), during which the investor cannot use his funds, for example, reduce the balance as a result of the withdrawal of funds. Professional AMCs do not interfere with the withdrawal of funds and do not freeze assets for a certain period.
- No monthly asset management fees. A company that is confident in the success of its trading strategy does not require a monthly fee for asset management. It receives income only from successfully closed transactions, therefore it is aimed only at increasing the capital of its client, and not at a momentary one-time profit.
- Control of metrics and KPI. An experienced asset management company always uses money and risk management, and also controls a number of metrics:
- Risk reward ratio;
- Sharpe ratio;
- The ratio of successful deals to unsuccessful ones, etc.
- A wide, but at the same time, thoughtful selection of assets. It is good when the company does not go into risky and low-liquid assets (the so-called shitcoins), which are brought to the market as a result of ICO/IEO/Defi/NFT-activities. But at the same time, it is important not to get hung up on one or two assets, but to operate with a pool of liquid assets from the TOP-30.7. A wide range of strategies. An experienced company makes money both downtrend and uptrend. With any strong market movements accompanied by high asset volatility, you need to have a different set of tactics to close deals with a plus, not a minus.
- Algorithmic trading. Manual trading is often ineffective. One person or even a group of traders is not able to quickly respond to changes in the market, manipulations by market makers, and permanently appearing and disappearing “walls” in order books. To do this, it is necessary to use automated tools for analyzing and concluding deals, where algorithms consider all conditions and will invariably lead to success even with strong movements or even a sudden reversal of the market.
- Periodic reporting to the investor. An asset management company must continuously inform its clients about balance sheet changes, the number of successful and unsuccessful transactions, and capital growth. Reports should be submitted regularly, and the frequency should be established by agreement of the parties (the investor and the asset management company), but at least once a week.
FOBS Asset Management complies with all the above criteria and criteria of a reliable company, adheres to them firmly, and will be happy to increase the capital of its clients.