Investing Alone Or With A Professional

In today’s turbulent market a good question that every investor should be asking is whether they should be making their investment decisions alone or with the assistance of a professional investment advisor. There are pros and cons to both sides of the argument and I’ll attempt to outline those below. However, it’s important to have some goals defined before you even cross the bridge of who should be providing you with investment advice.

Without a clear set of goals and investment advisor isn’t going to be able to assist you in making decisions. Similarly, if you don’t know your short and long term plans you’ll be hard pressed to make effective investment decisions.

The first thing then is to determine what your goals are. Your investment goals should be specific and realistic, for example “I require to have $20,000 to purchase a new car in three years.” That is a specific goal, depending on your income it may also be realistic. Other goals would include funds for retirement, vacations, children’s education, etc. Determining these goals ahead of time will allow an advisor to recommend appropriate investment choices.

So what are the primary differences between the two and which route should I follow? Good question, let’s take a look.

Investing On Your Own

This can seem really daunting if you’ve never done it before. Listed below are some warnings:

• If you know nothing about investing, if the letters GIC, BA, ABCP are lost on you investing on your own isn’t for you.
• If you think the Dow Jones is a fashion label, investing by yourself is not a wise option.

Now that I have that out of the way, if you feel you fit within most of the items listed below investing on your own may be an option:

• Time. Do you have time to manage your investments on your own? As your investments grow this becomes more complex, as you open new accouts or purchase newer securities this can become more complex. Do you think you will have the time to keep on top of it?
• Knowledge. Do you understand enough about how the markets work to make decisions yourself? Have you read about different investment options? Are you aware of the different products and the risks associated with them? Moving back to the first point, do you have the time to keep on top of the market news?
• Interest. Will you stay interested in your investments for the long haul or is this a passing fad? Many people learn about new opportunities that are available and jump on them, only to have their interest dwindle over time. When this happens with your investments it can be catastrophic.

Investing on your own can be extremely rewarding. However, if you don’t have the time, knowledge, or long-term interest it may not be the best option for you. Many people claim to be sophisticated investors and some of them are. However, this doesn’t make it so. I work in the Financial sector, assisting clients with investing is part of what I do. However, I am not a electrician. While I can install some basic applications I wouldn’t want to wire a house. If you are investing yourself it is important to know your limits. Otherwise you may make some very large and costly decisions.

Investing With A Professional

There are many benefits to investing with a professional. While most, not all, charge some type of fee for their services that fee is there for a reason.

• A professional has time. It’s what they do for a living, they manage people’s money. It’s in their best interest to see that money grow. Granted it’s in economies like we have now that they really earn their living. Also, there are certain things that even the best investment advisor just can’t predict.
• A professional has knowledge. The financial industry requires levels of accreditation for those who work in it. Advisor are constantly reading and researching to keep abreast of market news and changes.
• A professional is in it for the long-haul. They’ll work with you on your plan and help you to reach your dreams. Their interested in you and want to see you succeed.

I recognize that this article appears very pro-advisor and there is a for reason that. Most people don’t have the time, knowledge or interest to run their own investments. They are better off in the hands of a professional. If you are one of the few who is able to run your own investments, I salute you and wish you luck.

If you’re one who feels you could benefit from the advice of a professional then visit your local bank or investment dealer and discuss what they can do for you. Benefit from their expertise.