A person can do wonders in his own field and just average to the fields he is not trained in. The point of this article is to outline the reasons why a financial advisor can prove to be your best friend when it comes to management of your money. Despite of the various comments you hear about financial advisor business, there are still reasons for you to consider a financial advisor for yourself. There is a lot of resource available online to help you find a good financial advisor.
Why do you need a Financial Advisor?
There are a few personality traits that hinder our financial decisions. Lets us see a few examples:
One of the common habits that most investors have is acting on their bias. They tend to get influenced easily based on hear say and made random decisions. Almost everybody also has a tendency to be inclined towards options that suit their requirements and judgements rather than believing something that are against their belief.
Another issue that comes is “herding” – meaning that we tend to follow the latest press reporting as the entire information than something of less consequence and possibly a short term movement instead of long term. Once people are convinced that they are heading towards a downswing they starting pulling their money out, which is already too late (loss making decision). In this way investors end up losing their money most of the times. People, who do invest intelligently, do make profits however, the percentage of such individuals in very less.
The movement of the market is further anticipated by our natural tendency to avoid losses, as they pinch more than making profits. In fact, very little attention needs to be paid to the short term movements and fundamental information is more relevant to ascertain long term gains.
The third most common problem with investors is that they think they need to tune their investments every quarter to keep their investments optimized. Reviewing stocks based on their quarterly results and believing that it needs attentions is another mistake that most people commit. Since, investment is made for a definite period of time so quarterly results will have very limited consequences on the long term prices.
If investors have a reliable financial advisor, he can help them with all the bad habits they have and help in fine tuning investments. The best way to find a good financial advisor is search for the best stock brokers online and comparing reviews and performances to get a fair idea of who is offering what?
If you follow what your financial advisor suggests you with a fair bit of research, you are bound to make profits. The share market is like a field where you seeds of investment and keep watering them for years. After a good amount of time (say 10-15 years) you tree of investment grows big. That is time you must cash on rather than looking for petty profits which hinder your path to greater profits.
