Three Common Misconceptions About Working With An Investment Advisor

Investing can be a complex affair, especially if you are not an expert in the field. However with hundreds of thousands of people making their first investments each year, it is no longer a field reserved for the seasoned professionals. However investments are a very risky business and could potentially be even riskier without a full understanding of the process and its implications. This is why many people choose to consult the expert knowledge of an independent investment advisor or broker in the initial stages.

In this article, we will explore three common myths regarding the service provided by investment advisors, offering you accurate and balanced information on the matter.

1. The advisor takes control of money and all decisions

A good independent investment advisor will seek to gain a good understanding of your financial situation and also your financial goals. They are likely to consider the four Ws in order to do this: why you are looking to invest, what you are hoping to do with the money, where you are looking to invest (if you have any idea) and also when you would like/hope to use the money.

By gathering these facts and gaining a full picture, they will be able to advise and make recommendations accordingly. An independent investment advisor is not there to take control of your money but rather to use their expertise to offer guidance to help you invest in a way which best suits your circumstances and aspirations. They will also discuss the risk factor and they are likely to try and ascertain your tolerance for risk and expected rate of return in order to be able to make relevant recommendations.

The money will remain yours and any decisions will also be your own however if you are unfamiliar with investing then seeking assistance from an independent investment advisor could help to offer guidance on a number of factors. They can advise you on what to invest in, whether to buy stocks or funds, investing for income or retirement, potential rates of return and also taxable costs of your investments.

2. Only beginners need investment advice

In actual fact, many people with existing investments turn to independent investment advisors when they are considering how to move forward. With bigger investments come greater risks therefore people often want to be as well-advised as possible.

Also investors who have been lucky enough to make profits on their first investments often find themselves wanting to grow it further and therefore look to invest in different ways which an investment advisor could offer guidance on.

An investment advisor is likely to analyse your existing investments and discuss your future investment aspirations in order to help make a plan for going forward.

3. If I use an investment advisor, I counteract some of the risk of investing

Sadly this is not true. Even the most seasoned experts in the field could not deny that investing carries great amount of risks and often people who have made the greatest profits have taken serious risks along the way. An independent investment advisor could help on finding the right investment suited to your attitude to risk, but they cannot the risk of any particular investment away.

Investments can be a good way of growing your money but profit is not guaranteed and is often based on things that are out of your control such as stock market movements. Therefore you should always bear in mind that you could lose all the money that you invest and be left to deal with the consequences.

Long Term Investment in Timber

For a long term and stable investment, you couldn’t do much better than an investment in teak. When other investments have been heading down hill, timber remains a solid investment opportunity for the smart investor. That said, just because timber is a safe investment, it doesn’t mean that it is one with low returns. If you look at the return on investment figures for the last forty years, timber comes out as a top performer.

If you are considering investing in teak then you should make sure that you do your research first. You should make yourself aware of the sort of returns that you can expect before you put any money down. Unfortunately this is not always as easy as it might seem as there are no properly defined international standards for measuring the price of teak.

One reason that timber is a great option for long term investment is that it can be cashed in early if the time is right. If you think that you might need to cash out of the investment early then teak is probably not your best bet. Fortunately there are plenty of other woods to invest in.

It is often the case that if the market conditions are right, the timber can be sold early. For example if the price of the timber has jumped up then the trees can be harvested and sold for an increased amount of money – often more than the trees would be worth at the end of the original investment period.

Timber should also be thought of as a long term investment option as various bodies are only predicting growth for the industry for the foreseeable future. The world continues to demand more timber each year and the demand always outstrips the supply, meaning that prices remain high. A study by the United Nations has estimated that by 2050 our demand for wood will have doubled from the level of demand that we see today. When you consider the length of timber investments, getting an interest in this type of forest today is a great option to secure your financial future.

Timber is such a long term investment that you are not going to be only securing your future, but also that of your children. By investing in this sort of long term venture you are going to have a solid investment that you can pass onto your children.

Alternatively, if you are younger and looking for investments that will be useful to you when you retire, investing in forestry will get you off to a great start in building your financial security for the later years in your life. Whatever way you look at it, investment in timber is a solid financial choice.