Should I try a do-it-yourself approach when beginning to invest .... or hire a financial advisor? Depends??
Below was my reply to another question I answered today on Investopedia. It's a great resource for answers. I hope this helps in your pursuit of investment knowledge.
"Your question holds a couple of interesting concepts. Should you do-it-yourself? How should you invest if you do? The first question is often asked to save on the cost of an advisor.
But what if an advisor was free, would it not pose another question? Do you love to invest and spend your time doing that? If you answer yes, then I would suggest you pursue the do-it-yourself approach. But if you do, then you should really spend the time to self-educate yourself and have patience developing a strategy that fits you.
Using an investment advisor or any professional should be a decision on added value. I use advisors for more experience or just because I don’t want to spend the time and effort myself. How much is your time worth? It’s just a simple cost-benefit analysis on whether to use an advisor. It’s really no different to why a business owner hires employees.
On the second question on how to invest: Over the years I’ve seen thousands of different strategies and a lot of them are useless but then I’ve seen a large amount that gets the investor to their goals. The ones that are successful are usually built around similar principals. I’ve found after 20 years investing for clients and myself that the only strategy that matters is the one that you like that gets you to your goal.
Everyone has a strategy they think best about how to fill a dishwasher, but I only care about the dishes getting clean. If the dishes don’t come out clean then you need to change strategy. Sure, someone can always find another way to include a couple more dishes, but do you care?"
Your questions, comments and feedback are always welcome!
All the best,
John Hamel is the Managing Member of Austec Wealth Management, LLC. helping current & retired business owners optimize relative to their company value and personal life.