10 Best Tips for Beginning Investors
March 16, 2020 | Coryanne Hicks | U.S. News & World Report
Stacy Miller, CFP® was recently featured in a U.S. News & World Report article titled 10 Best Tips for Beginning Investors. In it, author Coryanne Hicks shares easy to follow advice, including Stacy’s contribution, Tip #9: don’t be afraid to ask for help.
My best investing advice for beginners is if you’re not an expert, ask for help. And, in my opinion, not just any financial advice will do. Bottom line up front, studies have shown that hiring a financial advisor can increase your return on investment. So, hire a financial advisor, but keep in mind that this is a very important relationship, and you need to vet them like you would someone who will take care of your children.
- Start with recommendations from your trusted relationships; family, friends, accountants, attorneys, etc.
- Ask about certifications; Chartered Financial Analyst (CFA) and Certified Financial Planner™ CFP®) are two that I recommend. They show years of additional education, training, and expertise.
- Look up their record: https://adviserinfo.sec.gov/
- Are they a fiduciary? This means that they MUST act in your best interest in all circumstances.
- Ask about fees as they are not always transparent. There are management fees (for advice and managing the account), load fees and expense ratios (for ETFs and mutual funds), commissions, transaction fees, etc. There is a cost associated with investing; know that you are paying a fair price.
- You’re busy. You’ve got work and family and friends. Let an expert help you so you can do the things you need and want to do.
- With market volatility, there’s a lot of fear, uncertainty, and doubt. New studies on behavioral finance show that financial experts can help clients to make the right choices, thereby increasing your return on investment. When the market goes down, clients often want to sell, but selling is the only sure way to secure the loss. Markets go up and down.
It’s important for beginners to get help in making the smart choices based on all factors. There is a lot of information online to support the do-it-yourself investor, but you don’t always have the time or expertise to do it as well as a good financial advisor.