Relying on your Financial Advisor for investment ideas makes sense, but familiarizing yourself with the research department that provides this information is also a good idea.
A quality research department should:
Knowledge is Power
Learn about the research department behind your Financial Advisor as well as the information that it provides. The more you understand about the details behind an investment, the more likely you are to stick with it when the market turns bearish — an important fact to keep in mind when investing long-term.
For example, when the stock market turns downward, some investors want to sell a security they know little or nothing about, because they feel the pullback reflects the future potential of the underlying company. When the market declines, however, it often has little to do with the future of a particular business.
An informed investor, on the other hand, looks objectively at the research about a company during a market pullback to conclude whether lower prices present opportunities to buy more shares of a good investment at cheaper prices.
Whether you are an experienced investor or someone who has been buying stocks for only the last year or so, it’s not difficult to learn about the research department. Ask your Financial Advisor to provide information and to send you samples of research reports. If you like what you read, ask to be put on a mailing list.
Remember, the more you know about investing, the more confident you will be when you invest.