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Five reasons not to be a ‘do-it-yourself’ investor

Posted January 09, 2013 in Advice Column, Des Moines West

You can go online and invest, for modest fees. You can visit various websites for research and watch numerous cable shows for investment recommendations. So, why shouldn’t you be a “do-it-yourself” investor rather than work with a financial professional?

Actually, there are at least five good reasons why a financial advisor can help make you a better investor. A financial advisor can:

Ask the right questions. If you try to invest on your own, you may find yourself asking the wrong questions, such as: “What’s the ‘hottest’ investment out there?” A financial professional can help frame better questions, such as: “Given my individual risk tolerance and long-term goals, which investments should I consider to help me build a balanced portfolio?”

Look at your situation objectively. No matter how hard you try, you won’t be able to take all the emotion out of your investment choices. After all, your investment success will play a large role in some key areas of your life, such as your ability to enjoy a comfortable retirement. Consequently, if you think you’re not making the progress you should with your investments, you may be tempted to make a hasty decision to give your portfolio a “jolt.” Frequently, though, such choices can backfire. It’s better to invest with your head, not your heart. A financial advisor can analyze your situation, assess your risk tolerance and make appropriate recommendations.

Show a deeper understanding of investment research. You can look up many types of financial data on your own. A financial professional, with years of experience and training, is generally more capable of finding the research sources and making the most sense out of the results.

Put experience to work in making portfolio recommendations. Even if you’ve been investing for years, you might be surprised at all the underlying influences that go into making investment decisions. But a financial professional understands market patterns, the nature of diversification and other factors necessary in helping you make the right choices for your situation.

Spend time looking for opportunities. Even if you enjoy the process of investing, the chances are quite good that you can’t spend as much time on it as a financial professional. When you work closely with a financial advisor, he or she is exploring the financial markets for new investment prospects while reviewing your portfolio for possibilities of upgrading quality, increasing diversification or making adjustments in response to changes in your life.

The “do-it-yourself” route may be fine for home repairs. But when it comes to managing your investment situation, there are benefits to working with a professional.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Information provided by Pat Franke, financial advisor, Edward Jones, 3520 Ingersoll, Des Moines, 255-9641.





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