If you are one of the many self-directed investors who gets a terrible feeling when their brokerage statement arrives, it may be time to consider hiring a financial advisor. It has been years since the “dot.com” bubble, the housing market imploded and the global recession started. While the markets have been able to come back and hit multi-year highs, the economy continues to struggle and experts remain divided on whether or not the recession ended. So what’s next?
For most people, the facts leave them in a constant state of confusion, and worse, many people find themselves second-guessing some of the investment decisions they’ve made or are about to make. The worst situations many people find themselves in are a state of “decision-making paralysis” and doing nothing for fear of making the wrong decision. This path will nearly always result in failure and this is the exact time when you are ready to get benefited from a financial advisor.
So, how can a financial advisor help you?
1. Analyze your statements
First, the financial advisor will get a copy of your statement, and even if you won’t look at it, they will. A smart financial advisor will take the initiative and help you with positive or negative news, tactics, and suggestions. This work behind the scenes is part of the many reasons why financial advisors cost money and a good one should be considered an investment rather than an expense. They are often the difference between your financial success and failure. Investing is not a get-rich scheme and it takes time, patience and dedication to be successful.
2. Reduce your financial stress
Second, one of the roles a financial advisor assumes is to reduce your financial stress and make the load lighter. They will assist you in simplifying your financial options and sharpening your focus on your short and long-term objectives. They are there to help you avoid making costly mistakes by challenging your thinking and holding you accountable. The advisor should educate you and assist you in focusing on the facts rather than the sales pitch.
3. Provide you with expertise and knowledge
Third, a good financial advisor will provide you with expertise and knowledge you may not have. Gamma, Beta, Standard Deviations, risk weighting and P/E ratios are all concepts that many people haven’t looked at since college. An advisor, on the other hand, will sit down with you and explain what they mean to you and how they may affect your financial portfolios. These types of conversations with advisors assist consumers in avoiding undue risk and focusing on their long-term goals.
4. Avoid taking unnecessary risks
Additionally, an advisor will work with both your estate planning attorney and CPA to help reduce taxes, avoid taking unnecessary risks and protect the things you’ve worked so hard to accumulate. There is a synergy between these professions and each has an impact on your overall financial health and future legacy. Hiring a financial advisor means hiring a personal advocate who will look out for your best interests. After that, you may concentrate on making the remainder of your life more joyful.