Some have called dabbling in the stock market the game of “Sophisticated Gambling.” Ball clubs and ponies are not being bet on, but companies and their products, profit, and management are. Investing in the stock market and other investment vehicles takes research, time, savvy, and more than just a little patience. While some investors, stockbrokers, and financial planners may be unprepared, rash, impulsive, compulsive, and unwise, the majority of those who make money and last are the ones who are just the opposite.
Investing is a Risk
Investing is a risk. There are no guarantees. Anyone who tells you otherwise probably has a bridge to sell you out of the back of their car.
If you have been around long enough, you have seen the stock market rise and fall, sometimes correcting quickly, being affected by war, profit-taking, poor or good economic news, geopolitical issues, and company management. Stocks can be a great place to make money, but one can also lose their shirts if not careful.
Having an investment strategy when getting into the stock market demonstrates wisdom, but is your strategy-wise? Day traders with a nice sum of expendable cash have popped up in the last decade, but many washes out sooner than later as the trading programs they purchase do little more than waste their time and money. The only surefire way to make money in the stock market is to get insider trading stock tips, and we all know where that leads.
You, the investor needs a professional financial advisor who can communicate with you, and execute a sound strategy, across the breadth of your investment portfolio. This beats going it alone. So how does one choose the right financial planner to help with stock investments and more?
Choosing a Financial Planner
Financial planners are in abundance, so what criteria should you use when looking to hire one to help you grow your money? This can be a daunting task for most people. It is recommended that you not give your money to the person who has neither the slickest, most colorful ad, nor the most personable one. Neither of these should prohibit you from doing business with a financial planner, but they should not be the main criteria. The following should be used when hiring a financial planner.
1) Excellent Reputation – Both in their community and their industry. Perhaps a friend or a business peer who has had long-term success with one can introduce you. Referrals are important to the financial planner, and the good ones work hard to earn their excellent reputation.
2) Have They Been Disciplined? – Be bold and ask right off the bat if the regulating authorities like your state’s insurance and securities department, FINRA, and the CFP Board have had complaints lodged against them, or are under investigation.
3) Certified – Certified Financial Planners should have a CFP certificate and the credentials to prove it. This typically requires that they have earned at least a 4-year degree, as well.
4) Relationship – While they do not have to become a great friend of yours, they should be interested in getting to know you and your family to the degree that will help them understand your life and family goals, debt obligations, retirement plans, and what your investment hopes are.
5) Educate You – A solid financial planning professional will educate you on what is involved in everything they will do for you and your money, even if this takes time. They should be certain that you understand what is involved, the process, and expectations.
6) Honesty – Your financial planner should be upfront about the strategy they will employ on your behalf. There is no “one size fits all” when it comes to smart financial planning, so they must tailor yours uniquely. Also, when it comes to stock tips, they do not push you on a “sure thing,” but let you ultimately make the decision based on solid, verifiable information.
7) References – It never hurts to ask for references. In fact, your financial planner can be a Fort Mill financial adviser or one located in New York. Location matters little. Strong references do.
8) Experience or Track Record? – Are they brand new in the industry? If so, it should not preclude you from doing business with them as there are more than a few brilliant financial planners who are relatively new. In fact, it is better that you have a financial planner who is new with a strong track record than someone who has been around for years but burns through clients.
9) Affiliations – Who are they affiliated with? Smith Barney? LPL? This will help you understand what kind of support they get as well as tell you about the strength of the company they are united with.
10) Trust – Ultimately, you have to trust them. You must feel comfortable with them, but this should follow all of the above, and not be the criteria you use before the rest has been pursued.
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