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How to Choose a Financial Advisor

In full disclosure, I am a financial advisor and for objectivity’s sake I’m going to pretend for a moment that I’m terminally ill and this is the advice that I’m giving to my existing clients on choosing someone other than me.

First of all, I think that you have to decipher fees versus costs. Yes, in the end it’s all money out of your pocket, but let’s think of a fee as something that is charged to you in the absence of value. You must take it for granted that all financial advisors are in the for profit business and there is nothing wrong with this, but do you feel that however much you’re paying them gives you value that you couldn’t find on your own or at a lower cost? Over the years I’ve come across many people who have investment accounts that are being charged fees. I like to ask them, “When was the last time you talked to the broker who set this up for you?” More often than not the answer is that they haven’t talked to them for years and when they do talk to them, it was the client reaching out to the broker. To me, clients in this situation are just paying fees. On the other hand, if your broker has created a financial plan for you (which, to me, I cannot personally fathom managing client assets without a financial plan), and there is some level of oversight and regular meetings, management and ongoing advice, then I see this as simply the cost for those services. Good advice is often worth many multiples of the cost for the advice – and this is true for all professions. In addition to this, they should be transparent about their costs. Sometimes costs are obvious, but sometimes they’re built into an investment. A broker should be able to explain what they’re for and what you get for them. I also have a personal bias toward independent advisors versus advisors who work for a large brokerage firm. Generally an independent advisor may to be able to control the cost structure better than an institution.

Secondly, you have to see if the financial advisor is listening to you or are they merely directing the conversation toward whatever product or solution they like to use? There are thousands of investment options out there and I’m of the opinion that there are many ways to proceed in terms of how you invest your money. But be suspicious when you are told about a product before they know anything about you (let alone, everything about you as a good advisor would seek to do). A good advisor asks a lot of questions about your situation, your goals, and objectives. They should get a comprehensive picture of everything about you. Investments should be approached as seeking to solve a problem or in pursuit of a goal. Think of it like a doctor. Imagine walking into a doctor’s office and before you can say a word, tells you to take some new pill or rushes you over for a chest x-ray. How can the advice be worth anything if the doctor hasn’t asked any questions? On the same note, you should feel comfortable telling your advisor everything; if you don’t, something is wrong.

Thirdly, what you eventually invest in should make sense. Easier said than done, but while you may not know all the nuances of everything, you should know roughly what’s being done and what the goals are. If you are trying to take regular income from an investment, you should understand why your investments are suited for that. If you are trying to minimize taxes, you should know why you chose your investments over other alternatives. There should be a level of simplicity and consistency to everything. An advisor shouldn’t be doing radically different things year over year and doing dramatic shifts to your money.

Fourthly, the financial advisor should have principles in what they do. I feel that one of the most common and devastating mistakes investors can make is panicking out of the market. I believe that an advisor who helps you with your natural emotions (there’s no shame in having fear) and can help you think long term is usually going to be well worth their costs. If you have an advisor who is chasing fads and running from fears, it’s going to be very hard to have a disciplined portfolio, let alone being relatively relaxed as the markets go up and down.

Lastly, never choose an advisor based on his or her claim or goal to beat an index such as the S&P 500 or the Dow. I believe that this is an absurd way to choose an advisor and anyone who claims the ability to predictably beat it is lying. It’s completely foolish to choose an advisor based on performance. If I may stay on my soapbox for another minute, I feel that the 24 hour news cycle (particularly if you watch business or financial news) has given the investing public the illusion that investing is all about market timing, stock selection, short term gains, etc. While there may be people in the world who are gifted to invest with this style, you shouldn’t look to your local broker to do it and even more so you shouldn’t try to do it on your own. From time to time I’ll come across people who’ve lately gotten cocky day-trading stocks or options online. I always tell them the same thing that I’ve never seen anyone successfully trade online for more than three years (and usually it’s just because the broader stock market is in an upswing anyway). Also, I have colleagues who give me stock tips. When they do I always have them put a time frame on it for growth and write it down on a sticky note in my desk drawer and check on it at the end of the time frame. It just doesn’t work for your average person which is you and it’s me and it’s pretty much every advisor you’re going to interview. Every day the world is getting more and more complex and it allows you to diversify better and more conveniently than all of history. One singular advisor is not going to be able to keep up with the various stocks in China or pour through lists of small US company stocks, let alone spend quality time digging through them, let alone daily stay on top of the various changes. You should expect that your advisor will delegate each sector to investment managers who specialize in each of these areas of the market and whose job it is to manage their portion of your portfolio.

Much of this is about determining whether or not an advisor is ethical; in my opinion, I’d rather have an advisor with stronger ethics than with clever investing ideas; if you find both, beg him or her to manage your money. Regrettably ethics is a very gray area. It’s something that you have to have an instinct about and if you don’t have an instinct about it take someone along with you who does. Don’t look for the letters after their name, the fancy car they drive, the mahogany in their office or the watch on their wrist. There should be a calmness and humility about them and they shouldn’t be in a hurry to get your money.

It’s also good to keep in mind that it’s getting easier and easier to have a professional advising relationship over the internet and over the phone. You may live in Green Bay, Wisconsin but could easily have a financial advisor in Denver, Colorado. Personally, I have clients in about 10 different states. It’s easy to be able to service clients in any US state and even internationally if needed. If you know of a good advisor somewhere else in the country, call him or her up and see if they can accommodate you. At a minimum, things can be done over the phone, but they should be able to help you through a webcam or other online tools.

Financial Analyst Job

A financial analyst job involves reviewing and analyzing the broad number of financial instruments available within a particular investment market. Based on their analyses, the financial analysis will then provide an interpretation as well as recommendations to the companies or individuals that they are working for. Financial analysis provide information that guides decisions in personal finance, corporate investments, company mergers, acquisitions and initial public offers (IPO). A financial services job can be found in a number of different companies.

Financial analyst careers based in a stock brokerage, investment firm or financial services company will be tasked with undertaking extensive research on the various options of investment that are available, analyzing the pros and cons of each depending on the companies short, medium and long term objectives, preparing the pertinent reports, making presentations on the data and recommendations to the key decision making organs within the organization. The sources of research for financial analysis are diverse and can include data on credible websites, company reports, business news, industry journals, company announcements and industry regulator reports.

A financial analyst job based in what can be termed as an ordinary non-finance business will be involved in preparing company budgets, end of year company accounts and performing financial audits to some degree. The financial analysis will be one of the key point persons in the design and negotiation of financial instruments that the business is contemplating. Such instruments or products would include foreign currency future contracts, price hedges and syndicated loans. If the business intends to raise funds through the public, financial analysis will be heavily involved in the process of structuring the IPO, rights issue, debenture, corporate bond, commercial paper etc. The financial analyst job will also prepare or oversee the preparation of dividend payouts as well as the financial reports for distribution to the shareholders.

So what do you need in order to succeed in financial analyst careers? First, you must be good in mathematics and statistics. This is because the financial analyst’s job demands a great deal of calculation and statistical data analysis. The need for mathematical aptitude cannot be overemphasized given that the reports that financial analysts develop will usually be used to make major and sometimes high value investment decisions on behalf of the institution he or she works for. But financial analysts will often be asked to make presentations to management so good presentation and reporting skills are of paramount importance. It is one thing to have accurate data-but it is completely another to communicate the data in a way that makes sense for an audience.

A financial analysis job will favor persons with an undergraduate degree in a business related field such as finance, commerce, business analysis, economics, business administration, business management, accounting etcetera. A minor, a separate degree or a postgraduate qualification in mathematics or statistics will be an added advantage. Senior financial analysts’ jobs will often have much more stringent requirements such as the need to have a Masters in Business Administration (MBA) or a Masters in Finance. In addition, many firms now require that one have professional qualifications such as Certified Public Accounting (CPA), Certified International Investment Analyst (CIIA) or Chartered Financial Analysis (CFA).

Forex Trading Strategies – Don’t Trade Forex Without Learning About How to Use News

Forex trading strategies in place, you’re ready to take on the currency markets. Your charts are set up, your indicators and oscillators are pulsating and your trend lines have clearly marked the way price will go. You enter your trade confident of carving up 20 pips or more before lunch.

Life is good.

Next thing you know, price has shot off in the opposite direction and soon your stop loss is taken out for a hefty loss. You sit there stunned and ask yourself, “What just happened?”.

The answer is that the market obviously got some new information to revise its expectations. That news could have come from many sources – a government economic report, the veiled utterance of a central banker at a press conference, some new statistics on a country’s exports…

Factors such as these have a direct influence on the sentiment on market players. These players are the big guns of the foreign exchange markets – the banks and trading companies who routinely trade billions of dollars daily.

If you want to trade on the side of these players (and be aware that the opposite side is known as the ‘dumb money’), you need to keep up with the same news releases as they do. So when the big boys move, you’re ready to go with them.

But how do you do this without being an economics graduate with a dedicated financial news feed?

You’ll be glad to know it’s far simpler than you might think.

The first thing you need to know which among the myriad news items released weekly will significantly move the forex markets. Many free forex calendar websites offer this kind of information.

Then you have to know when to place your trade. Sometimes it’s best to take your position ahead of the announcement. Sometimes it’s better to wait for the announcement to move the market and then enter with a trade when the market has settled down into a trend.

The trick is to know which news releases to apply which strategy to. But this is far from being rocket science. In fact it’s something you can master in a matter of hours and which can boost your forex trading results immeasurably.

Forex Trading Strategies are many and varied. So if you’ve found fx trading difficult, look into incorporating trading the news into your system. It might be just the key you’ve been looking for.

The Best Car Insurance Rates

If your car insurance is due for renewal and you are considering buying another policy then this article will provide you with important facts that you should know about. Car insurance policies are getting increasingly expensive and you should do all that you can to reduce your costs. How much you have to pay for your car insurance is dictated by a variety of factors as they apply to you and your vehicle.

In this article we will examine coverage limits, your age, gender and marital status, your location and insuring other household members. All of these factors will have a great influence on how much you will have to pay for your policy.

Coverage limits are generally dictated by the price that you are willing to pay for your insurance. A higher level of coverage will generally result in higher premiums. The best way to find a good value policy is to comparison shop. Nowadays it is generally accepted that the best way to do this is by using a car insurance comparison website.

Your age, gender and marital status will have a great effect on the auto insurance rates that you are offered. Insurers rate drivers using a variety of criteria, if you are a young single male driver you will usually have to pay higher rates. If you are a middle-aged female married driver then your rates will be lower. Insurers calculate the best car insurance rates for you by comparing levels of risk. Those groups which are statistically more likely to be involved in an accident have to pay correspondingly higher rates.

Location plays an important part in deciding how much your premiums will cost. Drivers who live in an urban environment will usually pay more than those from a rural area. This is because drivers who live in cities and heavily populated areas are more likely to be involved in an accident, or to have their car stolen or vandalized. Insurers generally offer better rates if you’re able to demonstrate that you keep your vehicle in a garage at night. You may also be able to improve the security arrangements of your automobile by fitting an alarm, immobilizer and steering wheel lock.

Insuring other household members will have an influence on the cost of your policy and the best car insurance rates that you offered. If you have teenage family members living with you and they are added to your policy, then your costs will increase. This may still work out cheaper than if your teenage driver were to have a separate policy in their own name.

In conclusion, there are a variety of different factors which can affect your ability to be offered the best insurance rates. Some of these are coverage limits, how old you are, whether you are male or female and whether you are married or single. Your rates will also be affected by the area where you live and whether other household members are included in your policy.