Investing 101

Surrounding ourselves with wise counsel is an integral part of a successful plan. As a Gwinnett CPA for decades we have learned that going it alone is a precipice for disaster. Hiring a Gwinnett/Metro Atlanta Financial Planner is essential to avoiding costly miscues. Though it is doubtful if any of us would perform our own operation due to the detail of expertise required, many of us would and will continue to make our own investment decisions absent the experience, expertise, and wisdom of a certified financial planner. Though you might have a gifted investment track record, the odds are against you when you plow forward without properly using the vast amount of resources that are at your disposal by solely picking up the phone. It is prudent to seek the referral of a trusted CPA when making the decision to interview a financial adviser. He or she will be better served to both differentiate between having a professional whom is geared towards assisting you. Left alone we are much more apt to fail then if we seek wise and judicious counsel.

“Plans fail for lack of counsel, but with many advisers they succeed.” (Proverbs 15:22)

Hiring a Certified Financial Planner

Being a pilot of a small plane does not provide the requisite knowledge to fly a Space Shuttle. One would find flying a craft into space with all the advanced technology and equipment daunting for even the best single engine pilot. However, I would be eager to fly at a moment’s notice with a Space Shuttle pilot anywhere in the world.

In seeking out advisers we are best served by finding expertise that relates to the decision at hand as well as someone who is seasoned in wisdom and expertise in the area where you are investing your time and resources. Many times people will seek out advisers whose chosen field of expertise is not much different than their own, or not directly in the field of experience one needs. Just as you would not seek the medical advice of a CPA, you should not pursue investment counsel from someone who is not in the field full-time.

Though even a blind squirrel might find a nut or a lucky investor hit a home run, we are most apt to find long-term success when we surround ourselves with the requisite knowledge, certification, and experience we will be needing as we pilot through uncharted waters. Though certification does not guarantee wisdom, it does provide a building block upon which decisions are made, allowing an adviser to have a broader and more stable base to guide your retirement.

Just as you would not trust your children to anyone who is not trustworthy and able to provide the very best care, you should not trust the savings for your child’s education to anyone who is less than the best at what they do. Reviewing a planner’s track record including their resume, education, honors both within and after school, investment into their profession and community would all be important criteria during the evaluation process. Also checking references and a careful review of an adviser’s investment strategy and temperament against that of your own will help to ensure a better long-term choice.

Investment Philosophy

Buying should be a well thought out and prudent decision involving cash forecasting, a long-range view, and a tough skin. Volatility in the market will often prompt individuals to do exactly the opposite of would be wise. We are most apt to invest emotionally rather than rationally. When the market starts a good positive run/a bull market, there are many who will run out and invest when the market is at or near its peak. As well, many if not all of us desire to sell when the market falls/a bear market guaranteeing that we sell at or near the market’s/a stocks lowest price. What we should be doing, however, is exactly the opposite from what our heart tells us to do as we ought to buy when a market is low guaranteeing ourselves a better price than not and sell, generally speaking, when a market is high allowing ourselves to maximize our rate return on a particular investment.

Mutual Funds

Are you already busy with your day packed from morning to night with an exhaustive array of duties, responsibilities, a job, children, and more? Does your cell, work, and home phone ring as those who believe they need us now track us down like a bloodhound to ask us about plans for the week ahead. If you already have enough to do and are not looking for another job for which you are apt not to be good at anyway, then mutual funds might be your best bet.

Remember, if we are left alone we are more apt to fail. Adding an additional layer of wisdom is a prudent decision helping to ensure a more positive long-term experience. Having a CPA who recommends an adviser with both professionals helping to show the options and risk of various investment scenarios helps increase your chances of success. Accordingly adding a mutual fund, which is professionally managed, adds an additional layer of wisdom and experience to assist in making on-going decisions about investments. A mutual fund is required to have a prospectus that details, in accordance with carefully written and maintained standards, the fund’s standards, investment style, past performance, up-front and on-going fees, and its strategy for investing. Also professional fund managers will supervise the day-to-day decisions that are reached, adding a layer of professional fund management that will guide the investment of your monies.

Buying Individual Stocks/Day Trading

Unless you are ready to quit your day job it is most difficult to buy individual stocks and do well. The market, along with its inherent volatility, is not for the meek of heart. Buying a piece of a particular company or developing your own personal portfolio will not only heighten your need for your own investment research but also it will quicken your pulse. Without someone to help in the initial purchase decision, you alone will be responsible for all of the due diligence during the whole of a time a position/purchase is made. Although there are many investors who are successful in their own account, there are many more who are not. Believing that it is hard to do one thing well, it is usually most advantageous for quality of life and rate of return to leave the investing up to the professionals. This is not to say that you should not review each and every decision as you should, but it is more like betting on a good horse and staying the course.

Left alone we are more apt to fail but by surrounding ourselves with wise investors we are best able to fulfill our long-term dreams. By working with us you will gain the wisdom of our personal experiences and long-term financial strategies. By keeping in mind that it was the turtle that won the race we can slow down the face of our financial decisions helping us to make more prudent long term decisions. Call us today to allow us to help refer to you a financial planner to help in this process and to get started.

Contact His CPA (A Christian CPA Firm) today.