One of the major challenges affecting both advisors and investors is that there is no middle ground between professionals and DIY type investors. For the most part, investors are either totally dependent on an advisor or completely independent. But it doesn’t have to be that way. We have found some middle ground over the years by examining what DIYers usually do well and what they tend to need help with.
Strong Foundation But Not Always Prepared To Succeed
Although many DIY investors have a solid portfolio foundation, they’re handicapped because they can’t quantify the risk they are taking, or explain how adding or removing an investment will impact their portfolio. That’s not a big deal for beginning DIY investors but a potential red flag for those who have already accumulated wealth to the point where they are more worried about losing what they have instead of earning more. Essentially, they’ve been so focused on growing their portfolios it never dawned on them to develop a plan for what to do once they actually reach their investment goals.
That can be both good and bad news. The positive is that it is possible for current and future DIYers to go out and hit their initial investment goals without a professional. The downside is that DIY investors need to invest more time, energy, and even money into learning how to manage the other side of the investment equation – the risk side. Instead of simply relying on financial ratios or technical analysis as a means of selecting and managing their portfolio returns, DIY investors need to integrate risk metrics like beta, standard deviation, correlation, draw down, and stress tests to protect what’s been accumulated, or to convert savings into income.
The nice thing is you don’t have to pull out the old slide rule to figure this stuff out or shell out thousands of dollars for investment software. We can do that for you with a variety of tools and help you take your portfolio to the next level for a flat fee or annual retainer.
Guilty Feelings About Part-time Success
Many DIY investors admit that investing isn’t their full-time job. They pick at it occasionally and avoid being glued to the latest economic releases or earnings reports. The fact that DIY investors don’t necessarily have to spend 24 hours a day, 7 days a week, on this stuff should be reassuring.
However, many of DIY types admit feeling guilty, worried, or anxious about the time they think they should be devoting to their portfolio management. Factors such as time of year, weather, family dynamics, and personal health all play a role in how much time they commit to the process, especially for retirees. While, we realize most DIY investors are in it for the long-haul and have learned to ignore daily fluctuations, for those who have journeyed long and hard to get to this point, working with a professional that sends out regular market updates can offer some helpful information and much needed respite. That’s why we suggest you subscribe to our quarterly newsletter by clicking here
Planning For Now But Not Later
Another major void facing many DIY investors is what happens when they’re no longer in the driver’s seat. Be it death, illness, or some degree of incapacity, they need a plan for someone else to step in and take over. This is particularly important for married couples, who could be faced with some difficult decisions if something happens to the spouse handling the DIY investing. A spouse suddenly left holding a basket of stuff they don’t know what to do with is unlikely to know who to trust or where to turn for help.
That makes aligning with a professional advisor essential to one’s overall plan… and is exactly why we offer flat-fee relationships or annual retainers for DIYers and their families.
In Need Of A Colleague
Finally, what we have learned is that the one thing DIY investors want and desire most is a sounding board; a person on the inside that can either confirm what they are thinking or help them see their ideas from a fresh perspective. And, as always, they want it done without being asked to buy something.
Most DIY investors are comfortable buying and selling stocks and doing some of the research … and that’s a positive … but they also want a second opinion from a resource who is on their team but not a “yes” person who simply agrees with their ideas in order to earn a commission or sell a product.
Are you a DIY investor who feels good about the work you have done up to this point but would like to talk with a professional to help sort out some of the other challenges that come with managing all of your hard-earned savings? Contact us to day and let us be your sounding board, risk manager or informational support team. We’re ready to find some middle ground with you and put our collective knowledge and experience to work together.
Are you feeling overwhelmed, confused or burdened by your various retirement savings accounts? Looking for someone to help you get things organized and on a track to help you achieve your financial goals? Contact us today and put our knowledge and experience to work for you. There is no cost for an initial meeting where we can get to know more about you and discuss next steps to taming your retirement savings hodgepodge.
Click here to schedule or meeting or call (423) 247-1152 to request more information.