Should you pay for a professional to manage your investments, or save some money and do the work yourself? The only person who can answer this question is you. But you need to know what you are capable of before you can depend upon yourself to make financial decisions for your future. Do you have the time and energy to put together a balanced investment portfolio that won't dissolve if the market takes a severe plummet? Are you relatively comfortable with basic financial matters and terminology? For example, do you know the difference between load and no-load investments? Sure, you can start looking things up on the internet and you will have a wealth of information.
But are you able to assimilate and merge that information into a solid plan for your future financial health? Put it in Writing If you decide to use a professional, you will need to ask them questions. Put those questions in writing and you will not be surprised later. For example, if a professional tells you there are certain fees for their services then make sure all the fees are clearly stated. Make sure there are no hidden costs or expenses not covered.
There should be some schedule of fees for various services offered. What personal and business references can you get from an investment advisor? But remember there are some slick people out there who have fooled a lot of well informed investors. All you can do is minimize your risks by choosing an investment professional who has a solid, positive track record of success. This is an area where personal knowledge with some level of involvement in your investment plan becomes highly advantageous.
Do You Have What it Takes? There are several areas in which you will need to have ability or knowledge to be successful in managing your own investments. The more awareness and knowledge you have in any of these topics will directly relate to your success with investments.
*Will your emotions affect or even drive your investment making decisions?
*Do you look at investing in with a long-range perspective of 10+ years or more?
*Do you understand the concept of risk management and how the time until you need your investment money back determines how you should modify your risk?
For example, if you need your investment capital back in less than five years, the stock market might not be your best choice for investment.
*Can you analyze financial documents like a balance sheet and income statement? Do you know how to find problems in a company using both of these financial documents?
*Do you understand how to create a diverse portfolio that will weather changes in the market with minimal change in overall portfolio value?
You can learn the information you need to know, and even modify your aversion to risk. But, for a reasonable fee a professional financial planner knows what it takes for a successful return on your investments with an objective outlook on your long or short term goals...