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The Risks of DIY Investing& Financial Planning

In trying to do it yourself, there’s the chance you could do it all wrong.

Many successful people refrain from trying to plan their financial futures. They delegate such matters to professionals, as they lack the time, inclination, or knowledge to do it all by themselves.

This makes sense. It takes years to gain a thorough understanding of financial market cycles and behaviors, macroeconomic forces, investment classes, and wealth management principles. Beyond that, continuing education is a must for any financial advisor. As the saying goes, you could make a career out of this. Indeed, financial advisors have.

The learning curve for a do-it-yourself investor may be steep and expensive. Like a basketball team focused only on the fast break, little attention may be paid to defense. A quest for great returns may mean taking an eye off crucial opportunities for tax savings. If the investor succumbs to emotional decision-making and market timing in volatile moments, portfolio performance may suffer.

The core problem is mistaking investing for financial planning. A good financial plan is multi-faceted; it needs to be. It may contain an investment strategy, a risk management approach, a tax management strategy, and a withdrawal and spending strategy if the client is a retiree. There may be college planning involved, and some estate planning as well.

Financial planning is both a discipline and a profession, and disciplined investors can see the value in seeking help from a professional.

Call today to discuss how you can avoid financial planning mistakes.


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    This material was prepared for John A. Gordon and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting, or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax, or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.
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