Modern financial system is illuminated in such a way that most of the times it becomes difficult to avoid falling victim to greed. In other words, the greed to make easy money has now become so intense that most of the times it overpowers their financial wisdom. We even see small investors getting attracted to board the bus of money easy money. The ‘hefty’ returns on investment are magically highlighted to lure a common man to catch hold of the schemes by hook or crook.
Falling victim to this greed of making quick and easy money, a huge chain of small investors has already lost thousands of crores in ‘fraudulent’ schemes in which investors are paid from money collected from new investors instead of the scheme generating earnings. The scheme runs as long as new investors keep investing in the scheme.
We frequently come across investment and savings schemes promising abnormal rate of interest. The high rate of return promised is not at all matching to the market environment. Investing in such schemes is always a very risky proposition. And the chances are that it is a trap to rob investors of their hard earned money.
However, it’s not only matter of ‘dubious’ financial schemes, even a lot of small investors lack guidance to explore appropriate investment options. They are even clueless about the loan schemes to bank upon for their economic prosperity.
In the given circumstances, role of financial advisors has assumed significance and you have to think about the importance of a financial advisor as you think about a doctor who prescribes medicines for treatment of your illness. Precisely, a financial advisor is like a medical doctor for an investor.
Before making any investment, it would not be a bad idea to have an opinion of a financial advisor. For example, you should not to go in the stock market without a professional financial consultant. This way you can lay hand on profitable investment tools and a worry-free future with respect to your financial strength. You may think about yourself as the knowledgeable investor for having access to financial information on the internet, but the fact is that advice of a financial advisor in the matters of stock market definitely makes a difference.
Today the market is flooded with varied financial instruments and it is impossible for an individual to understand everything that is available for them. In this crowd of financial instruments, individuals cannot pick what is best for them and it’s only a good financial advisor who can help an investor to put the right investments in place.
Since financial markets are unpredictable, we cannot say financial advisors will give foolproof advice. However, his advice based on your particular situation and goals can help you to minimize the financial risks. To get maximum out of your financial advisor, you have to at least let him know about your level of conservativeness and your appetite of risk.
Precisely, you have to make your financial advisor to understand you better so that his financial plan for you includes a diversified portfolio of various instruments to meet your goals. It’s the financial advisor who will help you to strike a balance by making you aware of various options.
However, engaging a financial advisor doesn’t exonerate you to remain aloof from your investment portfolio. Once you are on board with a financial advisor and your portfolio is put together, you need to monitor that portfolio. You should have regular performance review of your investment portfolio with your financial advisor. Don’t forget to update your advisor about any life situation change which you may undergo at any point of time.
So the bottom line is that the basic aim of every investor is to see their assets grow over time. As far as managing money is concerned, you can certainly go for it all alone. Doing it yourself is, of course, a brilliant idea, but mastering money management skills especially vis-à-vis stock market requires intensive research and learning.
Day by day as you get busier, your financial goals get more complicated. It’s here a financial consultant’s role emerges and he can help you to remain disciplined about your financial strategies. However, ask him questions and follow his advice will surely not only lead to growth in your investment but also help to minimize your risk in the event of any ‘perfect storm’ situation.
In succinct, look for a professional financial advisor to accomplish your goals. The financial advisor is also your educator to make you understand the complex things in investment and other financial matters. to achieve sound financial health
(The views are of the author & not the institution he works for)