Why a Financial Advisor?
There are many reasons to have a professional financial advisor working to help you achieve your goals. Here are a few points to consider.
Why does the average investor underperform?
Dalbar conducts a study of average investor returns, which demonstrates that the “average equity fund investor” does not achieve investment returns close to what the market returned. Over the past 20 years, the average investor realized a 4.48% return while the market generated almost 12%. This underperformance is driven by:
Lack of a clear strategy
An undisciplined approach
Allowing decisions to be driven by emotions
An overconfident approach with unrealistic expectations
Did your portfolio suffer significantly in 2000-2002 and 2008-2009?
Our active management approach seeks to reduce our clients' equity investments in weak periods and increase equity investments during strong periods. Long-term, we believe that our approach can help offset the effects of multiple bear markets. It cannot, however, guarantee that profits will be made or that losses will not occur.
Do you have an investment discipline that will guide you through future bull and bear markets?
A historical view of the stock market indicates that “bear markets” (downward movements in the stock market of 20% or greater) occur every four to five years. Learn more about secular cycles.
Have you changed your investment strategy in light of the potential for rising interest rates?
Many people use a basic buy-and-hold investment approach. Buy and hold was a popular investment approach in the 1980s and 1990s when interest rates were falling. With interest rates poised to rise in the future, the investing outlook has changed, and buy-and-hold investing is likely to lead to unacceptable returns. In order to realize their desired returns, investors may want to consider using a different, more active investment strategy than they have used in the past, while maintaining proper diversification.
Would you like to estimate whether you can retire on your expected retirement date and live a long and comfortable retirement?
Most people have never received a professional retirement plan that analyzes their financial situation to see if their retirement hopes are reasonable. If the plan projections do not meet your goals, an advisor can develop a strategy to improve your situation.
If you die tomorrow, are your heirs in a position to manage your investments and handle your complex financial and estate matters?
These are difficult issues even for people experienced with investments and financial matters. A good advisor will step in and help your family during such times.
Do you want personalized service and an approach that is customized to your needs and objectives?
Each of our clients is unique based on their objectives, mix of investment accounts (retirement or taxable accounts), mix of custodians (TIAA, Fidelity, Pershing, SEI, etc.), tolerance for risk, etc. Although much of the implementation is similar, our advice and management are customized to each family.
What estate planning approaches should you consider under the expected new tax laws?
After review and discussion, do you need a recommendation for an estate-planning attorney, or to a CPA to help with your taxes? A good advisor has these contacts.