Do You "Park and Pray"?
'Parking' your money with the broker or investment manager your accountant or friend recommended, (but about whom you know nothing) and 'Praying' everything will OK is a common practice among investors. It's also unwise.
The alternative? Ask to be EDUCATED.
Changing from passive, and perhaps misplaced, reliance to proactive, knowledgeable independence will make a world of difference in how you feel about your finances, and ultimately how you allow yourself and your money to be treated by your broker.
'Parking' Pitfalls
If you have no rapport with the person managing your investments, if you haven't built a level of trust with them and know nothing about them or their level of experience and education, how motivated are you going to be to communicate with them regularly? More likely you will close down and avoid communication and contact altogether.
Unfortunately for you, what this means is that your advisor loses crucial information about what's going on in your life. As a result he/she is unable to make appropriate financial recommendations.
Ask To Be Educated
It's up to you to get educated - about your advisor, your investments and the market.
Carefully check out a potential advisor's background, education and experience. Read the company's prospectus carefully and then ask the questions: What fees do you charge? How soon can I get my money out if I need it? Who is managing the fund? How will you monitor my investments to know if they're doing well for me?
Once you're comfortable with your choice of advisor, and have got that rapport going, make it a habit to regularly ask thm the right questions:
- What's going on in the market today?
- What's going up? Going down?
- How are my investments doing?
You become educated by learning about the good and the bad. If a stock is not doing well, it's important to ask questions. That way you'll know whether it's a good idea to stick with it or get out.
Are you 'Parking and Praying'? Be honest. If you are, it's not too late to make a change.
