Get an Advisor: Money and Time Well Spent
Get an Advisor: Money and Time Well Spent
- January 16th, 2012By Guy M. Lerner, MD: ARL Advisers
When it comes to investing and the markets, there is a lot of noise out there, and for the casual observer, it can be rather confusing. Even professionals, with all their resources, have a difficult time beating their benchmarks. So what makes you think you can do a better job? As it turns out, most individual investors do not perform well in the markets.
The stock market can be cruel. A lot of money is paid to pundits and analysts to explain the unexplainable and make order out of chaos. But no matter how diligent one is in their approach to the markets, truth be told, you cannot predict the future. We often hear what a great leading indicator the market is, but I wonder what the market was thinking at the October, 2007 highs. 12 months later the major market indices had lost half their value. There are no absolutes in the markets.
There are many reasons for individual investors to underperform in the markets including but not limited to lack of knowledge, chasing hot stocks, lack of diversification, poor understanding of money management, and on and on. The market is a tough game to “master”, and like any difficult endeavor, it takes hours and hours of practice and study, and even then there are no guarantees. My advice is to seek professional help. It is money and time well spent.
But what should you look for in a financial advisor?
Trust. An investment advisor is meant to be someone you can trust, and they have a fiduciary responsibility to put your interests first. They are not a broker whose purpose is to sell “stuff” for the firm.
What do they offer? Not all advisors are financial planners, yet most financial planners do advise on securities. At ARL Advisers, we specialize in one thing: providing security analysis and constructing risk adjusted portfolios for our clients.
What about performance? This is a difficult question to answer as there is no simple benchmark to measure against. Suffice it to say most professionals and lay persons underperformed the markets in the past 10 years.
Do you understand the investment strategy? Although hard, investing isn’t rocket science. All that is usually required is to execute a well thought out plan.
Can your adviser tailor a strategy that will reach your goals? Does your adviser offer alternative investments and strategies?
Is the adviser concerned with risks as well as the rewards? Avoid promises of wealth and instant riches.
Fees. The lower the better.
You go to the trainer at the gym to get yourself in shape. You seek medical attention when your health is deteriorating. Get your financial health in order. Don’t go at it alone….Get an advisor!
Guy M. Lerner, MD has been writing about the financial markets for over 8 years. Lerner is the principal partner in ARL Advisers, a registered investment adviser in the State of Kentucky with clients throughout the country. ARL Advisers provides investors an alternative to passive money management and the limited asset allocation models of financial advisers. To learn more about the author or ARL Advisers: call 502 552 0018; email: guy@arladvisers.com; website: www.arladvisers.com.
