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Spring is in the Air - 5 Questions to Ask Your Financial Advisor

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  1. 1. Ross Naylor +48 (22) 389 65 70 (w) +48 512 275 706 (m) ul. Królewska 27 lok 411 Warszawa 00-060 Poland Spring is in the Air Wow!! I was able to take my dog Max for a walk without having to wear a coat this morning. This was pretty exciting as it Did You Know? was the first time that Ihave been able to do so since he joined our family a few The term "blue chip" derives frommonths ago. the colour of the most expensive gambling chip at MontecarloWhat does that have to do with your money, you ask? casinos.Well, it got me thinking about spring and all that it entails renewal, growth, planting seeds for the future, etc.This in turn got me thinking about financial planning (yes,I think I need to get out more too). Anyway, it made methink about the sorts of questions clients should beasking their financial adviser at this time; here are 5 ofthe most important ones that came to mind. Cautious Optimism?5 Questions to Ask Your Shipping giant A.P. Moller-
  2. 2. Financial Ad viser Maersk recently agreed to purchase 30 enormous new ships for a total of USD5.41. What is my true financial situation? Billion.Re-examine your investment goals, time frame, risk They are obviously counting ontolerance and financial circumstances. Ask yourself continued growth in global trade.whether any of these objectives or circumstances havechanged Also, on a similar theme, if you have read previous issues of my ezine, you will have seen meFor example, have you been accumulating cash during refer to the Baltic Dry Index.the financial crisis, as a result of being unsure aboutwhere to safely invest it? If so, will that more cautious Well, as you can see from theinvestment mix still allow you to achieve your long-term chart above, it has rallied upgoals such as saving for your childrens education or from Februarys low point,funding for your own retirement? suggesting increasing demand for shipping.2. How should I be thinking about risk in thecurrent environment? However, its current level is still 50% below its historic norm. Room for improvement I think.Did you view yourself as an aggressive investor prior tothe financial crisis? Now is time to truly ask yourself whatyour risk tolerance is. Has it changed or are you justfeeling understandable unease as a result of the crisis?The hardest thing to do when markets and stocks aregoing down is to stay the course. For some, this isbecause they have taken too much risk at the top of themarket.Many investors then end up going to cash or bonds when Thoughts onmarkets are declining. Eventually, after a recovery has Commoditiesalready begun, they think, What have I been missing?Eventually they come back in, but only after a good deal This is a thought provokingof the gains have already been made. interview with Jim Rogers. He is an unashamed commodity bull so his enthusiasm should be3. Do I need to reconsider my time frame? taken with a pinch of salt. At the same time he is also anHow long is your time frame? All things being equal, you extremely successful investor.can afford to be more aggressive if you have a longertime frame. For example, I would recommend that the Obviously considering an assetinvestment mix of a 32-year-old be more heavily class 10 years into a bull run isweighted in equities than that of someone who is close to risky. However, his thoughts areretirement. certainly worth considering when sipping your coffee and munching your cornflakes (asCan you adjust your plans to retire? Perhaps you once they are both going to be
  3. 3. planned to retire early at 55 and then your i nvestment considerably more expensive ifportfolio shrank in 2008. Ask your adviser to calculate he is right).how long you would have to work beyond 55 to build aportfolio that can produce a lifelong income stream. DisclaimerIf you could wait to retire at 60, you would add five The views expressed here are myvaluable more years of income and investing, while own. They are not necessarilyreducing your withdrawal phase by five years at the same shared by AES International. Theytime. are subject to change at any time based on market and other[You can find th e last 2 questions here] conditions. This is not an offer or solicitationAnd finally... for the purchase or sale of any security and should not be construed as such. References tothanks for spending some of your valuable time reading specific securities are formy thoughts, it is greatly appreciated. illustrative or informational purposes only and are notAs always, if you have any comments or feedback, feel intended to be, and should not befree to drop me a line. interpreted as, recommendations to purchase or sell such securities.Ross. Call me: +48 (22) 389 65 70 (w) +48 512 275 706 (m)