Why it pays to use an expert when investing. And the sooner, the better.

Why it pays to use an expert when investing. And the sooner, the better.

It’s important to know when to ask for help. This is the case for any walk of life and certainly true when it comes to dealing with your finances. Ignoring a problem, or putting off making a decision, is rarely going to be the best course of action but it’s something we all end up doing from time to time.

We put off going to the dentist in the hope that our tooth just somehow starts to feel better and we ignore the dripping tap in the bathroom. We may even ignore the strange noise the car has started to make to avoid taking it to the garage.

There’s definitely a certain sense of satisfaction when things somehow work themselves out, but it’s an all too infrequent occurrence. It’s certainly not something to be relied upon. More than likely, the best course of action is to book your dentist appointment as soon as you know something’s not quite right, or better still have regular check-ups, call out the plumber at the first sign of a problem and have your car fixed at the earliest opportunity.

Firstly, you’ll be saving yourself a lot of potential worry and pain, but you’ll also be making sure that whatever needs addressing doesn’t get any worse in the meantime.

Avoiding the hassle

When managing your money, making the right decisions in terms of saving and investing is important.

Just as eating well or committing to exercise each week can potentially save you from health problems in the future, making sensible financial decisions can lead to a lot less financial stress later on in life.

Too much confidence

However, knowing where to go and who to talk to about important investment decisions can be a challenge. It’s a minefield out there and there are many different services to choose from. Should you speak to a Financial Adviser? Maybe, if you have a significant amount to invest or have complex investment needs. It can be an expensive option though so you need to be sure your requirements justify the cost – the investment management fees you pay can have a significant impact on returns.

Or do you do it yourself? A recent survey by unbiased.com revealed 40% of people who choose not to take financial advice do so because they are confident they can do it themselves.

Being confident is a great trait to have. Being overly confident isn’t. Unless you’re a doctor, you wouldn’t rely on a self-diagnosis, so why do so many people try to invest without seeking professional help?

Investing requires a certain level of knowledge and expertise to make sure you put your money in an investment that is right for you. It requires time to do your research and a familiarity of investment matters. You need to understand the importance of a diversified investment portfolio for example and have an appreciation of investment timeframe, as well as an awareness of things like liquidity (i.e. how accessible your money is), and the trade-off between risk and return. In summary, you need to be sure that any investment you make is suited to your individual circumstances and appetite for investment risk.
It’s certainly not something to be taken lightly and the financial stakes of getting it wrong should not be underestimated. The chances of investing in an unsuitable investment are high if you don’t know what you are doing.

So, with all of this in mind, why do such a large proportion of people seem to be so confident about their investment decisions? Decisions that will potentially impact how their lives are spent in the future. One of the problems is that confidence can be hard to dent until you see the adverse effects. With investing, and financial advice in general, this can often come much later down the line. Or not until the stock market takes a turn for the worst.

Know your limits

There are so many ‘do it yourself’ investing services available that people can begin to think they should be making their own investing decisions. And while this might be true for the experts among us, it won’t be for the majority.

Absolutely, people should feel empowered to tackle their finances and take an interest in money, but that interest should be sensible and practical too. Like anything in life, you need to know your boundaries; when to ask for help and when to do something yourself.

We think most people simply don’t know where to turn for help but investing is something that can be done quickly and simply with the right service.

 

 

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  3. Are you a set and forget investor?

 

Any news and/or views expressed within this article are intended as general information only and should not be viewed as a form of personal recommendation. This article is not directed to, or intended for distribution or use in, any jurisdiction where such distribution would be prohibited. To the extent permitted by law, Wealth Horizon accepts no duty of care or liability for loss occasioned to any person acting or refraining from acting as a result of any material contained within this article. Where past performance is shown, this should not be taken as a guide to future returns. Investment in the stock market is not a suitable place for short term money. The value of investments and associated income may go down as well as up and you may not get back the full amount invested.

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Investment risk: Investment in the stock market is not a suitable place for short term money and you may not get back what you put in. All investment carries risk and it is important you understand this, if you are in any doubt about whether an investment is suitable for you, please contact us. Investment in the stock market and any income derived from it, may go down as well as up.

Wealth Horizon certainly lives up to its promise of making investment simple to understand

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