Although the focus of this blog is to understand the mechanics of the market and occasionally look at potentially interesting stocks, picking equities to invest in is the last step of an investment plan not the first.
You should begin by meeting with a financial adviser. The first sign that they have your best interests at heart is if they get to know your current income and goals. Other important topics which should be covered before you even consider buying anything are:
- Do they know your current financial position? Income? Expenditures? Savings?
- Do they understand your risk tolerance?
- Do they know your time horizons?
- Are they aware of your goals for home ownership, further education, raising children?
- Are they aware of your retirement time line and income expectations?
- Liquidity needs
- Risk tolerance
- Expected growth plans
- Asset allocation
- Suitability - Will you be able to sleep at night?
If you ask the right questions, you will feel more confident about the advice you receive and if you pick the right advisor they won't mind a collaberative approach to the mutual success your partnership will create.
2 comments:
Hey Josh,
If I have a very short term investment horizon (1-2 years before buying a house) do you think I would benefit from meeting with a financial advisor?
Or does it make sense for me to just hang onto cash until I'm ready to take on home ownership?
My thought it that with such a short time horizon my risk tolerance is too low to even bother. I'll be interested to hear what you have to say.
Thanks,
Steve
What a timely and relevant question.
I saw your question and had so many ideas swimming in my head that I wrote an entire post dedicated to your question.
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