How Do i know if i need help?


For Walter, investing was almost spiritual.  Everyday, he read new affirmations of his faith from other adherents on his favorite blog.  They shared stories of the wonderful things their beliefs could do.  They talked with admiration of the purest disciples of their group, and followed every word of their pronouncements.  They scoffed at skeptics, assured that their path was the only correct one.  Following this path would lead to happiness and contentment through the achievement of their salvation during the coming Armageddon, when all who believed would be rewarded with prosperity and vindication for hewing to the good and righteous path.


Does this sound like the “buy and hold” philosophy?  A focus on quality funds, good management, low expenses, and targeted investment objectives.  Having the fortitude to ignore the market ups and downs, always repeating the mantra “buy low, sell high”.  Hang on when the market goes off a cliff, keeping the faith that it will come back.


Is there any problem with this philosophy?  In what cases would it not work?  Usually in the case of human beings trying to accomplish it.  There is always going to be someone, somewhere, who can continue smiling, serene and content, when the market is dropping 40% and the headlines are screaming about the coming collapse. But human beings are social animals, and our society has made progress by sticking together and accomplishing things as a group.  It is very hard to pick the right times to go against the crowd, because the crowd is very often right.  The reason the market drops so much at certain times is because most people are reacting in a way that seems right in that situation.


I think that Walter and his fellow believers are right – over time the markets go up, and growth continues.  If people can hang on to their investments, never panic, and buy cheap assets when the time is right, they will eventually be rewarded with growth in their investment portfolios.  However, the problem arises when actual humans try to follow this path.  


What goes wrong?  In trying to figure out what is going to happen in the near future, most people look at recent history and assume that will continue.  Whether it is high unemployment and falling stock prices, or low inflation and cheap oil, we tend to take what is happening today and use that as the baseline.  If stock prices are falling by 2% to 3% every day, and the news is full of talking heads predicting another Great Depression, many investors will decide that it is time to sell first and ask questions later.


Wouldn’t it be nice at times like these to have someone you could talk to about the feelings of panic, about how hard it is to watch your savings built over a lifetime just melt away on a daily basis, and offer reassurance and a vision of hope?  Someone who could remind you that you knew this was coming?  Someone who helped you prepare for this day during the calm and peaceful time that seemed as if it would never end?


If you get excited about researching investments, dealing with paperwork, organizing multiple accounts, staying current with industry developments, and monitoring global markets, then you probably don’t need the help of an advisor.


However, if you would like to devote your attention to the rest of your life, knowing that someone is there to provide clarity and guidance when needed, you may benefit from an advisory relationship.