After making a contribution to a self-directed IRA I considered opening an investment account for pre-retirement investing. Opening an account is the easy part. Who will be the person I hire to make the investing decisions? Will I hire myself in a self-directed account, or will hire a financial advisor to make the investing choices? Here are some things to considering when making the choice of who to hire.
How Much Are You Investing?
If you have lots of money to invest, it may not be the best option to choose yourself as the advisor. How much experience do you have in investing? Are you money savvy and will be able to ride the waving tides of the stock market? If you’re wanting to do individual stocks, it will be higher risk than an index fund. A financial advisor would be beneficial to be able to monitor the companies as well as plan strategically.
If you don’t have a lot to invest it might make sense for you to be the one to do the work. You may also want to consider investing in less risky stock, just as an index fund. If you don’t have a lot to invest, you might not want to spend the percentage on a professional. If bad days on the stock market is going to be extremely stressful for you, a professional might be beneficial.
What Kind of Pro?
If you choose to have a professional manage your investments you can choose to have comprehensive services if you want to be completely hands off in your investing. They will be more more expensive but you won’t have to deal with the headache of investing, you leave that to them. You could also choose to do hourly investment advising. This will leave you responsible at making the investments but you will be able to have consultations when you need them regarding specific needs.
What Are Your Expectations?
If you have a small amount to invest and are leaning toward self directing, what are your plans for your portfolio? Are you wanting to take your time and invest in low risk index funds? Do you want to potentially make more money and invest in higher risk stocks, such as individual markets? Even if you are investing small amounts of money, higher risk situations might benefit from a professional overseeing your portfolio. If you have the right professional, you will lower your risk with them using their experience and understanding of the investing. Higher risk means more of your time spent on watching those investments.
There are many different kinds of investing. If you’re wanting to invest in the stock market there are a few things to consider such as: how much you’re investing, what your goals are, and what kind of professional help you want if you choose a professional. The decision is as individual as your investment account. Take time to consider what is best for you and your situation at this point in time, it can always change down the road.
How about you? What did you decide when investing?