August has been a rough month for most investors. Considering all the red arrows pointing downward on the Wall Street charts and the ongoing parade of unfavorable news, it’s no wonder that many investors are teetering on the edge of uncertainty. Add in the recent unrest in Hong Kong and it’s easy to understand the negative mindset that seems to be prevalent.
It’s common practice for most financial advisors to reference history as they point out that the investment world has bounced back from such adversity and down markets time after time.
But, while history is helpful in framing today’s financial markets, social issues and concerns, nobody knows for certain what lies ahead in this tumultuous world.
History may be enlightening, but it doesn’t guarantee the future. And it’s just human nature to be wary of the unknown. The investment world, just like everyday life, is full of the unexpected. So it’s no surprise that so many people feel so stressed out.
A financial advisor might not be able to solve the world’s many issues, but if you work with one that’s well rounded, you just might be able to alleviate some of your money worries and lighten your load.
Obviously, an advisor can’t simply wave a magic wand and make all your financial concerns disappear. But a financial advisor can help you analyze and organize your financial state of affairs, then work with you to develop and achieve your goals. Ultimately, an advisor can bring order and clarity to your personal financial plan.
Automakers don’t just turn on the assembly line, throw random parts on it and hope a completed vehicle rolls off the end. Engineers have to work on the details for years before the line is ever turned on.
Homebuilders don’t just show up with lumber, hammers and nails to build a house. An architect has to provide meticulous blueprints.
It’s the same with finances. You need a blueprint. Unfortunately, many people don’t have one. They just run their finances haphazardly, from paycheck to paycheck. And that often causes more stress.
Can you imagine a homebuilder forgetting to roof a house? Too many people overlook the financial equivalent of a roof, life insurance. A financial advisor can review your circumstances and recommend the coverage you require.
It’s the same with mortgages. In spite of all the mortgage ads on television, I’m surprised how many of my clients weren’t aware they could improve their cash flow by refinancing.
Recently, a new client didn’t fully understand an investment he made or the risks associated with it. Such unknowns also contribute to financial stress.
When people have a better understanding of their investments, it helps them get through the occasional rough patch, like the one we’re going through now.
Proper financial planning is more than just picking an investment and crunching the numbers. You might do well. But a financial advisor, with detailed knowledge of a client’s family history, temperament and goals is ideally positioned to help lead you down the unpredictable path of life.
There are a lot of good reasons to have a financial advisor. That notion was confirmed at a financial advisors convention I recently attended. Exciting people? Maybe not. But definitely among the most caring, sharing and optimistic people I’ve ever met.
E-mail your questions to email@example.com. Ken is a Registered Representative of LPL Financial. Ken is Vice-President of the Society for Lifetime Planning. All opinions expressed are those of Ken Morris. LPL and Society for Lifetime Planning are independent companies. Securities offered through LPL Financial, Member FINRA/SIPC. Investing involves risk including loss of principal. No strategy assures success or protects against loss.