An investment advisor is an expensive item in your retirement plan. Unless you are dealing with a lot of money, you might want to hold off on an investment advisor. In the beginning your retirement may consist of investing in your company’s 40lk or 403b. You don’t need an investment advisor for that. Put enough money in to get the maximum in matching funds from your employer. Other than that, start a savings account and save as much as you can.
Later on, you may want to get an investment advisor because you’re ready to go beyond savings and company retirement plans, but go carefully. Advisors for big companies like American Express, Fidelity, Vanguard, and others, are going to want to sell you their products. It would be better to find an advisor who has nothing to sell.
As for finding someone you can trust, it is best to get some personal recommendations from people you know and trust, family and friends. Make an appointment and meet with this person and see how you feel. Entrusting your retirement to another human being is huge and you’d better feel very comfortable with your choice.
As for myself, I didn’t get an advisor. Instead I listened to a friend of mine who had done some considerable research in a particular industry. The people who actually make money on the stock market, as opposed to those who talk about making money, are what are called “contrarians.” Their philosophy is, “When everyone else is selling, buy. When everyone else is buying, sell.” This is because by the time everyone jumps on the bandwagon and a stock is going up like crazy, that’s just when it’s about to top out and take a downturn. You want to sell. When a stock is plummeting and everybody is scrambling to get out, that’s when you want to buy.
The problem is you will probably never make much money investing if you listen to the talking heads on TV or most professional advisors. If the professional advisor is really good, she or he would be wealthy and wouldn’t need to advise anyone. The talking heads are either following some party line that is out of touch with reality or they are pimping their own products. Look for the contrarians and pay attention to what they are saying.
Three-and-a-half years ago, my friend told me the contrarians were talking about gold and precious metals. Three-and-half years ago the mainstream financial wizards called gold the “barbarous relic.” I invested based on free newsletters written by guys and gals who were actually investing their money in the stocks they were recommending. I read articles by investors. I began to invest modestly, not only buying precious metal stocks but also buying physical gold and silver. I read articles and followed recommendations.
Some gained and some lost. A couple of my investments went out of business. But three-and-half years later, my physical gold has gone up nearly 86% in value. My physical silver has gone up over 83%. My entire portfolio, including quite a few stocks that are in the red, is up about 145%.
I’m not saying that no one should get an investment advisor. I’m saying to be sure that your advisor will benefit you more than what you have to pay.