Are you frustrated with the level of growth you experience when you attempt to invest on your own? Do you feel left out when your friends or coworkers talk about how much money they are making in the market while the value of your portfolio barely budges? If the answer is yes, it is probably a good time for you to take the next step in investing journey and ditch DIY investing by finally hiring a professional. A good financial advisor can bring your portfolio to a higher level. And depending who you work with you won't have to turn over management of your portfolio to reap the benefits.
9 Real Reasons Why You Need to Hire a Financial Advisor
A financial advisor can help you avoid the many pitfalls of DIY investing, including:
1.Big picture thinking
Very few people invest for the fun of it. Most invest to accomplish specific goals like sending children to college or being able to retire one day. A financial advisor can help develop goals with an investment strategy to accomplish them. This will help minimize emotion-driven investment decisions by incorporating the right balance of risk and return needed to meet big-picture objectives.
Saving money is just as good as earning money. One way to do this is to reduce taxes. If you know what you're doing you can save a bundle on investment-related costs and taxes. An inexperienced investor may not be aware of the tax saving benefits of locating assets in specific accounts, taking advantageous of Roth conversions or exploiting cost and tax efficient rebalancing. A financial advisor with strong tax law and investment chops can save you a bundle in taxes and identify opportunities and threats that lay on the horizon.
3. Removing the Urge to Trade on Emotions
You've probably become more than a little emotional when you think about your money. And when it comes to investing, listening to these emotions more often than not can end disastrously. It takes a particular type of person to be able to put aside feelings and make the right decision every time. A financial advisor is free of any emotional attachments, focuses on the big picture and is able to choose the action(s) in your best interest.
4. Failing to Employ a Disciplined Process
Hunches and tips rarely work out in the long run, but choosing and sticking to a proven investment strategy does. Your financial advisor has years of investment experience to use as a guide, and will never risk your money over a gut feeling or a rumor. Instead all decisions will be guided by a goal-driven, disciplined investment strategy focused on pursuing goals, not chasing returns.
5. Avoiding Rebalancing a Portfolio
Selling a well-performing asset to buy another financial instrument which is under performing is crazy, right? Well, not if you know what you are doing. Most DIY investors are reluctant to make such seemingly counter-productive moves, but the pros know when it makes sense to take the risk. Your financial advisor can craft a well-planned rebalancing strategy sensitive to costs and taxes to deliver the returns needed to support goals while managing risks.
6. Putting All Your Eggs in One Basket
The old adage, ”Only invest in what you know," is good advice, but if you don't have experience with several types of financial assets, your portfolio probably isn't diverse enough to offer you very much stability. A good financial advisor will make sure your investment strategy is neither under- or over-diversified to maximize up markets and minimize down markets.
7. Selling When the Market Gets Scary
The market is down for the second week in a row, and the value of your portfolio is dropping like a stone. Are you going to have the guts to stick with your investment system? Most DIY investors don't and wind up not only selling their investments for a loss but missing out on the very lucrative rebound. Financial advisors don't get scared by adverse market conditions and will remind clients markets go up and down and sticking to the plan is usually the best course of action.
8. Trying to Call Tops and Bottoms
You have heard it a thousand times, "Buy low, sell high," but attempting to call the tops and bottoms of a volatile market can cause you to lose out on a lot of profit. A professional investor knows being afraid to pull the trigger on a trade because the fear of getting every cent from a trade is silly as long as you can catch the majority of the trend. Your financial advisor can be a constant reminder that time in the market is more important than timing the market.
9. Sleepless Nights
Investing on your own is stressful. If the market is up, you are worried whether you should ride the wave as long as possible or take your profit now. But if the market is down, it is even worse. You are terrified your investments will never recover. Why do that to yourself? Do your due diligence, hire the best financial advisor you can, and rest easy.
Why make investing harder than it has to be? Take your life back and build a stronger portfolio by speaking with a financial advisor today.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.