Lindell G. Douglas, CFP®
Managing Partner

(954) 306-8668

Investment Read Time: 3 min

Separating the Signal From the Noise

What kind of role can a financial professional play for an investor?

The answer: an important one. While the value of such a relationship is hard to quantify, the intangible benefits may be long-lasting.

There are certain investors who turn to a financial professional with one goal in mind: the "alpha" objective of beating the market. But even Wall Street's brightest money managers can come up short.

At some point, these investors realize that their financial professional has no control over what happens in the financial markets. They come to understand the real value of the relationship, which is about strategy, coaching, and understanding.

A financial professional can provide guidance about today's financial climate, determine objectives, and assess progress toward those goals. Alone, an investor may find it difficult to do any of these tasks. Moreover, an investor may make self-defeating decisions. Today's steady stream of information can prompt emotional behavior and may lead to blunders.

No investor is infallible.

Investors can feel that way during a great year when every decision seems to work out well. But overconfidence may set in, and the reality that the markets have challenging years can be forgotten.

A financial professional can help an investor commit to staying on track.

Through subtle or overt coaching, the investor can learn to take short-term market volatility in stride and focus on the long term. A strategy is put in place based on the investor's goals, risk tolerance, and time horizon.

As the investor-professional relationship unfolds, the investor begins to notice the intangible ways the professional provides value. The professional may help explain the subtleties of investment trends and how potential risk often relates to potential reward.

Perhaps most importantly, the professional helps the client get past the "noise" and "buzz" of the financial markets to see what is really important to their financial life.

The investor gains a new level of understanding, a context for all the investing and saving. The effort to build wealth and retire well is not merely focused on success but also significance.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. 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. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. 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. Copyright FMG Suite.

Share |
 

Related Content

The Business Cycle

The Business Cycle

How will you weather the ups and downs of the business cycle?

What’s Your Investment IQ?

What’s Your Investment IQ?

You make decisions for your portfolio, but how much do you really know about the products you buy? Try this quiz

5 Smart Investing Principles

5 Smart Investing Principles

Principles that can help create a portfolio designed to pursue investment goals.

 

Have A Question About This Topic?







Thank you! Oops!

Don’t Be Your Own Worst Enemy

Emotional biases can adversely impact financial decision making. Here’s a few to be mindful of.

Investment Challenges of the Affluent Investor

Affluent investors face unique challenges when putting together an investment strategy. Make sure you keep these in mind.

Required Reading: The Economic Report of the President

The Economic Report of the President can help identify the forces driving — or dragging — the economy.

View all articles

Contributing to an IRA?

Determine if you are eligible to contribute to a traditional or Roth IRA.

How Compound Interest Works

Use this calculator to better see the potential impact of compound interest on an asset.

Impact of Taxes and Inflation

Estimate the potential impact taxes and inflation can have on the purchasing power of an investment.

View all calculators

5 Smart Investing Principles

Principles that can help create a portfolio designed to pursue investment goals.

5 Smart Investing Strategies

There are some smart strategies that may help you pursue your investment objectives

View all presentations

16 Wall Street Cliches in 60 Seconds

Pundits say a lot of things about the markets. Let's see if you can keep up.

Emerging Market Opportunities

What are your options for investing in emerging markets?

Investments

You’ve made investments your whole life. Work with us to help make the most of them.

View all videos