7 Reasons Why It's Time to Stop DIY Investing and Hire a Financial Advisor

In 2020, Canada saw a surge in new DIY investment accounts. Between January and December, 2.3 million DIY investment accounts were created. While jumping into the world of investments is an exciting move, this uptick in new DIY investors was not without issue.

Yes, the number of new DIY investors rose significantly, but so did complaints and inquiries to the Investment Industry Regulatory Organization of Canada (IIROC). In fact, IIROC’s Complaints & Inquiries department saw 270% more complaints in 2020 than in 2019.

You may be asking yourself if you should be a DIY investor or if you should hire a financial professional to help manage your portfolio. Here are seven reasons why it may be better to work with a financial professional.

Reason #1: They Deter Emotionally Driven Investment Decisions

Emotions come into play when making decisions about your own money - even when you don’t realize it’s happening. And when it comes to investing, making emotionally driven decisions can be detrimental to meeting your long-term financial goals.

It can be difficult to put aside feelings and make the right decision every time. A financial advisor is free of any emotional biases toward your wealth, meaning they can make objective, education-based decisions regarding your portfolio.

Reason #2: They Employ a More Disciplined Process

There are no guarantees with the stock market, even if you choose to follow stock trends closely. But choosing and sticking to a proven investment strategy may offer investors more peace of mind. Your financial advisor has investment experience to use as a guide, and they aren’t inclined to risk your money over a gut feeling or hot tip.

Reason #3: They Can Help Build More Balance

Would you sell a well-performing asset to buy another financial instrument that is underperforming? This is the type of question that a professional can help you answer. Most DIY investors are reluctant to make such seemingly counter-productive moves, but an advisor knows when it makes sense to take the risk or when you should wait before making a big move.

Reason #4: They Help Diversify Your Portfolio

The adage, “Only invest in what you know," is good advice, but if you don't have experience with various types of financial assets, your portfolio may not be diverse enough to fit your needs. A good financial advisor will make sure that your investment strategy is well-diversified to help minimize the damage of a market downturn.

Reason #5: They Help You Through Market Volatility

The market is down for the second week in a row, and the value of your portfolio is dropping. Are you going to stick with your investment strategy? Some DIY investors may not, which could mean missing out on a lucrative rebound. Financial professionals aren’t fearful of adverse market conditions and can help their clients through times of tumultuous market volatility.

Reason #6: They Avoid Calling Tops and Bottoms

You’ve heard the phrase, "buy low, sell high” for years, but attempting to call the tops and bottoms of a volatile market could cause you to lose out and add unnecessary stress to managing your portfolio. A professional can help keep you focused on the long-term performance of a stock instead of its short-term highs and lows.

Reason #7: They Alleviate Financial Stress

Investing on your own is stressful. If the market is up, you worry about whether you should ride the wave or take the profit. But if the market is down, you’re worried about recovering from a loss. Having a trusted financial professional to guide you through the emotional roller coaster of investing is important to your peace of mind and long-term success. They can help take the guesswork out of “Am I doing the right thing?” and help develop a strategy based on your overall goals.

You have enough on your plate already - there’s no need to make investing harder than it should be.

About Eric

Erickson Braund is the Founder and Chief Financial Officer at Black Walnut Wealth Management. He is a Certified Financial Planner®️ professional and a Chartered Retirement Planning Counselor®️. Eric brings over 20 years of experience working with high net-worth individuals and families, helping them achieve their goals of protecting and growing their wealth for retirement and for generations to come. Because Eric is a CFP®️ professional, he adheres to high ethical standards and engages in at least 30 hours of approved continuing education in the financial industry each year.

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