Nobody Cares About Your Money... More Than You!
Who should be running your 401K? If nobody cares about your money more than you, then why are people so quick to hand it off to someone else to manage? I personally think that a lot of it has to do with our school systems and the lack of financial education offered. Of course I was taught how to knit a scarf, cut open a frog and memorize many obscure poems to be recited to the class, but only a nickel's worth of education when it came to portfolio and financial management. In fact, unless you were a finance major in college or come from a family with experience in finances then you may find yourself in a similar position as myself, having to take the time to teach yourself this essential information. So is it even worth it or should you just hand it off to a professional?
Before I go any further, let me just say that many of you, especially those of you who don't have the time or inclination to do the research necessary to succeed, should not be actively investing in the market. You are probably better off just handing your money over to a financial advisor. Many financial advisors are very good at what they do and will help you reach your financial goals.
However, many good financial advisors often manage between 200 and 500 accounts, with total monetary values easily reaching into the seven, eight and nine figure range. With so many individual accounts to follow, advisors may only have time to open and evaluate your current positions once a week - hardly enough to maximize your returns. For many people a 10% yearly return will suffice, especially in difficult times.
As for me, I choose to take control of my finances. I do the research and actively manage my portfolio daily. The last two months I have seen a 17.6% return in this broad based market we have experienced. I know many private investors who annually see tremendous gains that no financial advisor I have ever known would be able to compare to. On the flip side, I have also seen many private amateur investors lose money in bullish markets and get wiped out in bearish markets.
With all this being said, I am not going to tell you either way is better or worse than the other. This decision varies greatly between individuals, their financial goals and risk tolerance. For me, I choose to try and aggressively grow my speculative money and conservatively grow my retirement funds. I feel my money is best suited in my hands. If I lose it, I know it is my fault. If my financial advisor loses it, he still gets his commission and makes money. Thus I conclude that nobody cares about my money more than I do. Do you agree?