FINANCING | Why consult a financial advisor? | latest news
The social distancing and stay-at-home measures made necessary by the coronavirus have led many of us to feel isolated. Still, we fought back through social media, ‘virtual’ gatherings, and neighborhood walks, where we could greet friends and neighbors (6 feet away). But when you face the financial effects of the virus and invest on your own, you might run into problems that can turn out to be costly.
Of course, with so much information about investing available online, on TV, and in many periodicals, it’s no surprise that some people think they can invest without any help. But the volatility of financial markets in recent months has also highlighted the dangers of going solo in the investment world. And you may find that a professional financial advisor can help you in a number of ways, including:
Remove the emotions of the investment. During this time of market turmoil, many independent investors let their emotions guide their investment decisions. As a result, they sell investments when their price is falling, “locking in” their losses. Moreover, if they then stay out of financial markets, they will miss the eventual rally – and some of the biggest gains in market rallies usually happen early on. But if you work with a financial advisor who has helped you develop a personalized investment strategy based on your goals, risk tolerance and time horizon, you will be much less likely to react to extreme market conditions by taking ill-advised decisions.
Maintaining the point of view. When you put money aside for the future and suddenly have a lot less, you might start to wonder if that future is somehow in danger. But if you’ve worked with a financial advisor and followed your investment strategy, you’ll know that you don’t have to cash out investments that have lost value immediately, and you may not need to liquidate them. for decades if they were designed for a long-term goal, such as retirement. By the time you need to sell them, their value may well have appreciated significantly. And if you have a well-constructed portfolio, you also hold short-term, less volatile investments to help you meet your current cash flow needs.
Understand the history of investing. The recent market instability is unique in that its cause – a global pandemic – is so unusual and, hopefully, will be a once in a lifetime experience. Typically, protracted market declines are triggered by explainable financial or economic factors, such as the bursting of the dot-com bubble in 2000. However, market declines of 20% or more – commonly referred to as markets Bearish – are not at all unusual and have happened every few years for the past several decades. Financial advisers know this story well and share it with their clients. And for many people, knowing that “we’ve been here before” is reassuring and makes it easier for them to continue to follow their investment strategies.
The road to your financial goals is long, with many twists and turns. So maybe you would like to have an experienced business along the way.