The Importance of a Financial Advisor
When you want a job done right, you usually hire a professional to get the best results. The same can be said for managing your finances. While you may have some ideas about what types of investments to own, a financial advisor can offer you the professional expertise and insight that you may not have. Magazines, cable television and web sites produce a wealth of investing information on a daily basis, but do you really have the time to evaluate it all to make the best investment decisions?
If youre a new investor, a financial advisor can help you determine the proper asset allocation to fit your lifestyle. If you currently have an investment portfolio, a financial advisor can evaluate your existing investments and determine if they are still appropriate for meeting your short- or long-term goals.
If you think you can manage your investments on your own, answer these questions, then decide if you should get a second opinion. Remember, a financial advisor has the time, knowledge, research tools, expertise and experience that you may not have. After all, investment planning is his or her full time job.
Answer These Questions
- Have you utilized asset allocation effectively?
- Do you know enough about all the individual stocks, bonds, mutual funds and money market funds to choose your investments wisely?
- Is your investment portfolio diversified enough to give you the best potential results?
- Do you have enough time to review your investments periodically to determine if you should reallocate your investments?
- Have you spoken with a tax advisor to determine if youre getting the most out of your investments?
- Are you secure enough with your investments to “stay the course” even in changing market conditions?
- Is your investment portfolio overweighted in a particular stock, sector or asset class?
- Do you think you can effectively “time” the market by always buying low and selling high?
- Are you taking advantage of the power of compounding?
- In case of an emergency (loss of job or sudden medical expense), do you have enough cash on hand to pay your bills without having to cash out at a lower price?
- Are you aware of the constantly changing tax laws and how they can impact your investments?
- Have you considered taking advantage of dollar cost averaging?*
- Are you able to take advantage of both taxable and tax-exempt investments?
- Do you understand how economic factors such as interest rates, unemployment, housing sales, inflation and productivity impact the economy, the stock market and your investments?
- Will you be prepared to pay for your children's college education and your retirement?
If you answered “no” to a few of these questions, perhaps you should consider working closely with a financial advisor to help you make the most informed investment choices for your personal situation. If you dont have a financial representative, we can help you find one.