6 Reasons to Stop DIY Investing and Hire an Investment Advisor
Are you stressed out over the market's gyrations? Worried that you may not have the right portfolio for your needs? Concerned about the emotionally-based portfolio changes that you have made? If the answer is yes, it is probably a good time for you to take the next step in your investing journey and hire a professional. A good investment advisor can take the burden off your shoulders.
An "investment advisor" is a financial advisor that specializes in managing investments. They are typically more highly educated, experienced, and credentialed than most financial advisors. Often they will hold the Chartered Financial Analyst (CFA) designation. They will usually be associated with a firm that is a registered investment advisor (RIA) rather than a brokerage or insurance company. Instead of being paid by commission, they will be paid a fee for their advice, normally as a percentage of the assets under management. An independent RIA will be free to put clients' interests first, as any fiduciary should.
7 Real Reasons Why You Need to Hire an Investment Advisor
An investment advisor can help you avoid the many pitfalls of DIY investing, including:
1. trading on Emotions
You've probably become more than a little emotional when you think about your money, especially lately. And when it comes to investing, listening to these emotions can end disastrously. It takes a particular type of person to be able to put aside feelings and make decisions based upon careful analysis of the data. As a professional, an investment advisor can be more objective with respect to your portfolio than you are.
2. 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. An investment advisor has access to enormous amounts of financial, economic, and statistical information, sophisticated tools to help analyze and interpret that data, and years of investment experience to use as a guide in implementing investment decisions.
3. Putting All Your Eggs in One Basket
The old adage, ”only invest in what you know," is often 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 investment advisor will make sure that your investment strategy is well diversified to control downside risk. This may include not only different types of stocks and bonds, but also alternative investments, which may be particularly important in today's market environment.
4. 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 to with your investment strategy? Some DIY investors don't and wind up selling their investments at a loss and missing out on the lucrative rebound. Experienced investment advisors have seen many adverse markets before, and have structured their investment processes accordingly.
5. Trying to Call Tops and Bottoms
Everyone tries to "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 is experienced at balancing the fact that markets usually follow trends with the knowledge that sometimes markets overshoot on both the upside and the downside. Incorporated both value and momentum in the right amounts at the right time is a skill that can only be honed through years of experience.
6. enduring 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 investment 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 an investment advisor today.
This content is developed from sources believed to be providing accurate information, and provided by Sapient Investments. 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.