A recent (November 9, 2021) Wall Street Journal article detailed that 70% of millennials (people under age 40) were self-directing their investment decisions. They could get good-enough and do-it-yourself advice from internet platforms and didn’t need an investment advisor.

One man in the article interviewed 4 advisors and felt each one put “too little effort into explaining how their investments were unique and worth the fees.” He decided to invest on his own, primarily in cryptocurrency and real estate. A woman in the article said, “I’m talking to, frankly, a bunch of old men.”

So here’s how I, a happy old investment advisor, would respond to the man who found 4 other advisors underwhelming.

Dear Mr. “Invest on your Own”

Thank-you for asking why use me? Great question. Here’s 3 reasons.

Reason #1: Falling off the investment cliff:

The stock market declined 30% in 2020 when Covid surfaced. Your $500,000 market investment could have declined to $350,000. What would you do? Fall off the investment cliff and panic-sell? Curse the stock market and swear you’ll never invest again? Or, on the other extreme, say that downside risk and loss doesn’t worry you. You only care about upside potential.

Losing $150,000 is a painful and big deal to me. If I’m managing your money, we’ve already had numerous conversations about your comfort level with investing. We’ve established a portfolio you’re comfortable with regardless of whether the market goes up or down 30%. My job is to keep your emotions steady, so you don’t make a rash decision based on fear. You will not fall off the investment cliff and instead minimize your losses.

Reason #2: Cross the finish line:

You want your investments to create enough money for an enjoyable life. So we create a plan. And then life occurs with expected and unexpected events and costs, i.e. change of jobs, children’s education, home improvements, etc. You pivot and adjust your plan accordingly. We talk and find ways to both finance these changing events and grow your money for a happy retirement.

We also have conversations that add to your financial security, i.e. establishing a trust, health, disability and long-term care insurance, a workable budget, etc.

Reason #3: You and I are similar. You and I are different.

You and I are similar. Both of us enjoy investing.

You and I are different. We have different investment styles. You invest most of your money in cryptocurrency and real estate. I invest most of my and my clients’ money in large, medium and small cap index and actively managed mutual funds. I know these investments.

Our different investment styles don’t make us either good or bad people. In fact, having different styles can be a strength. Your cryptocurrency investment may climb when the stock market declines. Or the stock market climbs when cryptocurrency falters.

What you and I have is a relationship where we discuss these differing strategies and create a plan you are comfortable with.

I hope these 3 above reasons stir you to call me. We proceed if we are a good fit. One solution to consider if you’re not sure about me is to have me manage a portion of your money. You manage the rest. Let’s compare our portfolio results after 3 years. You will give me more money to manage if you’re pleased with my work. You can take your money back and manage it yourself if you’re not pleased.

I wish you a happy and prosperous life.

Sincerely,

Dan Edwards Ph.D
Independent Investment Advisor

DanEdwardsInvestments.com