Tuesday, April 21, 2009

You need professional help

By Jason T. White, Ph.D.

Jason is a principal and director of investments for the Family Investment Center. As many families attempt to cut expenses, we’ve seen some question why the help of a professional advisor Is necessary. Jason had some thoughts on this that he wanted to share with our readers. He has a Ph.D. in Economics and Political Science from University of Missouri in Kansas City.
We’ll share his thoughts today and later this week.


Personal Training
A professional financial advisor is a little like a personal trainer. Their job is to motivate us to do things we might otherwise do on our own, and to know how to achieve long-term objectives.

Father’s Wisdom
Chances are dad or mom was the first person who took a real interest in teaching us how to save and accumulate wealth. You socked away a portion of your allowance, lawn-mowing or baby-sitting money for a rainy day. Your advisor can rekindle this forgotten or neglected family value of personal saving.

A Friend’s Ear
We have an unwritten rule at the Family Investment Center to talk about half as much of the time as our clients do. Our purpose in meeting with you is not to teach you advanced financial theory (although we will if you want!), but rather to clearly develop an understanding of your personal financial needs, goals, objectives, fears and values. A friend is there to listen and advise. This is what we strive to be.

Preventative Maintenance
When the engine blows a cylinder, the best mechanic in the world can’t save it. It’s toast. We manage our client portfolios designing backup systems, warning lights and stress tests to prevent you from laying a thick streak of Pennzoil in Turn 4 at Daytona.

Apocalypse Now?

Hardly. I have yet to witness the four horsemen on a final ride to destroy capitalism. But, if you watch too much CNBC, Fox, Cramer, Dobbs or even Leno, you might think the end is near. Hogwash! A seasoned investment professional will help you keep control of the trait most destructive to wealth accumulation: your emotions.

I Need the Market to Settle Down
Given a sufficient time horizon, I can guarantee you which way the market is headed – UP! It is not a question of “if” simply “when.” One of the biggest mistakes you can make as an investor is to “sit out a few plays” during a bear market. Odds are you will miss a big chunk up the upside rally when it comes – and they always do. A quality investment advisor will do everything he or she can to keep you in the game.

Tough Love and Fairness
When a fee-only investment advisor (no commissions) takes a position, it is with your best interests at heart. Our objectives are perfectly aligned with yours – we want you to growth wealthy, and when you do, we both prosper. The 20th century commissioned brokerage world is disappearing fast because of a misalignment with client objectives.

The Rise of the Equity Class
Wealthy people are made during hard times. Family Investment Center understands the transition to the ownership society. Stock market fortunes are NOT made in bull markets; they are made when the bears are roaring and traders start looking for the exits. You need an advisor to remind you why you have chosen to be an investor, and what the ultimate benefit of that choice will be.

Dollar-Cost Averaging Discipline
When stock market averages decline, the trader often feels he or she is “throwing good money after bad” when it comes to continuing his or her monthly savings program. The investor comes to recognize, through professional guidance, that these rare major declines should be viewed as generational buying opportunities. Instead of ceasing contributions like the trader, the investor digs a little deeper and tries to maximizing savings in their 401(k), IRA and other investment vehicles. Be an investor, not a trader.

Recognize the Obvious – Then Execute!
Everybody knows the name of the game in investing: “Buy Low and Sell High.” The biggest problem we see is do-it-yourself investors having the chutzpah to buy when others are capitulating. A financial coach or leader on your team can make all the difference in your long-term investment success.

Are You Selling Your House Now?
Across the country, housing prices have nosedived with the same velocity as stock prices. Rational behavior would be to treat both asset classes equally. Why would you sell your stock portfolio after a price decline, but not sell your house? Stock prices are likely to bounce back much quicker as the recession becomes a memory. A professional advisor can help you navigate these land mines.

No comments:

Post a Comment

Family Investment Center Videos

Loading...