The principles of investing have not changed, so why do I need advice?

By: J Lynne Stewart, MBA, CIM? , Director of Practice Management, Worldsource Wealth Management

In the past few years, with pandemics, wars, market meltdowns, natural disasters and inflation, we have been brought to our knees trying to understand how to create a secure future for ourselves and our families.

The stock market and investing have also gone through many cycles and evolved with more sophisticated strategies and opportunities. Luckily, the foundation and basic principles of smart investing and wealth building have not changed.

Let's take a closer look at these basic principles:

Rebalancing: You know how the saying goes – what goes up must come down. For this reason, a basic tenet of managing investments is to trim the things that have grown and prop up the ones that haven't yet had their moment. It has been shown repeatedly that this is key to sound portfolio management. It is tactical, administrative and, yet, something a self-directed investor often does not engage in.?

Advisors structure your account and fees in a way that integrates rebalancing on a regular basis.

Behavioural: Not only are we talking about your savings behaviour, but also your capacity to make good choices around what to invest in, how long to hold and having the foresight to know that your investments will return even if markets pull back. The one reoccurring issue is that investors who take their money out of the market often can't determine when to go back in - this is where most wealth is forfeited.?

Advisors have a big picture view of market growth and cycles and will keep you invested in your long-term goals.

Costs: As mentioned, rebalancing requires trading activity, which is unlikely to occur if you count costs on a transaction-by-transaction basis. Most managed strategies for investing include rebalancing trades and leaning into sound cost structure in terms of the number of individual holdings.?

Working with an advisor is not a transactional relationship but a strategic one.

Planning: Today, many platforms allow you to play around and gain insight into your financial and retirement plans, which is a good thing. But, it is behind the scenes where an advisor will understand the nuances and strategies that will lead to great wealth over the long term.?

Discussing your plan with an advisor can help you understand and recognize gaps and opportunities to ensure that your plan is realistic and attainable.

Tax Efficiencies: Advisors are well-versed in tax-efficient investments and strategies that even your accountant may be pleasantly surprised to see. Tax strategies are not just an annual thing. You can structure your investment portfolio at any time to create tax-efficient retirement years into the future.?

Advisors will work with you to forecast your retirement income and plan your current investments in anticipation.

There is so much that can be gained from talking with an informed expert.

We all have our own bias, our own way of filtering information based on our own experience and knowledge. But, there is so much potential wealth in investing into a relationship with an expert who has made it their life's work to provide planning, advice and support.