If you're a commissioned officer in the military, you've got a lot on the ball. It is very likely that you can DIY when it comes to investments. But bringing on a Financial Advisor to help you could be a good idea too. Many think Financial Advisors or Planners know secrets that will bring great returns. That's typically not the case and you shouldn't put much faith in promises of superior returns. That doesn't mean Financial Advisors won't add value to your portfolio.
6 Real Ways Financial Advisors Add Value for Military Officers
A financial advisor can help you avoid the many pitfalls of DIY investing, including:
1. Removing the Urge to Trade on Emotions
You've probably become more than a little emotional when you think about your money. And when it comes to investing, listening to these emotions more often than not can end disastrously. It takes a particular type of person to be able to put aside feelings and make the right decision every time. A financial advisor is less likely to be emotionally attached to your portfolio.
2. Failing to Employ a Disciplined Process
Hunches and tips rarely work out in the long run, but choosing and sticking to a proven investment strategy does. A financial advisor may have years of investment experience or education to use as a guide, and will never risk your money over a gut feeling or a rumor.
3. Avoiding Rebalancing a Portfolio
Selling a well-performing asset to buy another financial instrument which is under-performing is crazy, right? Well, not if you know what you are doing. Most DIY investors are reluctant to make such seemingly counter-productive moves, but the pros know when it makes sense to do this.
4. Putting All Your Eggs in One Basket
The old adage, ”Only invest in what you know," is good advice, but if you don't have experience with several types of financial assets, your portfolio probably isn't diverse enough to offer you very much stability. A good financial advisor will make sure that your investment strategy is well diversified to minimize down market risks.
5. Selling When the Market Gets Scary
The market is down for the second week in a row, and the value of your portfolio is dropping like a stone. Are you going to have the guts to stick to with your investment system? Most DIY investors don't and wind up not only selling their investments for a loss but missing out on the very lucrative rebound. Financial advisors don't get scared by adverse market conditions, so, their clients are in the market to take advantage of the rebound.
6. Sleepless Nights
Investing on your own is stressful. If the market is up, you are worried whether you should ride the wave as long as possible or take your profit now. But if the market is down, it is even worse. You are terrified your investments will never recover. Why do that to yourself? Do your due diligence, hire the best financial advisor you can, and rest easy.
You can of course avoid the issues above. But it takes a lot of self discipline and time. Or, you can delegate it to a professional who not only understands investments but also understands the intricacies of military benefits and military tax issues.
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This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.