Does one need a financial advisor

In the past few post, I have always kept saying buy into equity. It’s easier said than done. There are a few challenges one of them is getting returns. There are many strategies followed by analyst to make money. Some follow the P/E route where they track the P/E of the NIFTY or SENSEX and decide if this is the right time purchase a stock. Some follow the Price to book value method. Some methods are good for some industries, but you just blindly follow the same method for all industries. P/E would be good for IT industry and Price to book value for banking, but these are just indicators. These indicators along with a bit of research should help you get a good price. Frankly there is no one best way by which you could decide if a stock is good. You should research and buy only if you trust the company. Just as you would do for any other purchase.

We keep saying invest in equity, but do not go by reports. That means sit and do research. If I have to sit and do research, then why am I working I would have been buying and selling stocks as a full time occupation. This is where financial advisors and mutual funds come in. They are in a specialized field, just as you are. Everyone has different skill sets, you make your money using those skills and the financial advisors help you make money using theirs. So when you make money for your skills, why should they not for their skills? We are ready to pay a doctor, why? Because we believe he has the skills, but we are not ready to pay a financial advisor.

This is because we have got into the habit of getting things free, but nothing actually comes free. It is a risk a person takes, this risk is a gamble. The problem started because many insurance agents or mutual fund distributors started mascaraing as financial advisors. They were and are more interested in your investment, so they give you free advice, which in most cases is in their interests. Some of them are good, because of their experience in the financial industry. You would have made money, where you could have made more if you had invested with proper advice. But the point is have you made enough to secure your goals?

Goals are something which should drive your investments and not just invest and hope you have enough at the end to meet your goal. Goal based planning gives meaning, purpose and focus to your investments. Some people have money falling on their laps, whereas for others they have to struggle for it. Why not meet a financial advisor and work with him to meet your goals and ensure a secure and peaceful life. Like they always say, Money is the cause of all problems, those who have it don’t know what to do of it, and those who don’t have it know what it means.