Why should I use my advisor?

[iracer7]

I'm young (20), and have a good sum of money I'm looking to invest. My grandfather left me a good chunk of stocks and mutual funds that were invested through this local investment company, who pretty much became my financial advisor because my grandfather had to turn over the funds to me when I turned 18. I feel like I can do my own research and use online trading to buy what I want and sell when I want. The unrealized gain/loss for the account my grandfather has given me is -30%. I do an automatic withdrawal into this account which buys LMVTX, a mutual fund handled by Legg Mason, which is what my grandfather has invested in for the past 20 years, and HLACX which is a mutual fund handled by Hartford Investments...when I met the advisor he suggested I invest in this, so I do $75 a month and $50 in LMVTX. The LMVTX is well in the red, but my grandfather and FA say these are for the long term, though they've been beaten up and continue to get beaten up...I'm questioning why I am continually investing in these funds if they continue to lose money. I feel like the advice on the internet is as good as a financial advisor, and having to mail a check these days to buy stock just isn't convenient.

With the markets down the past few days and continuing to go down until a debt deal gets passed, I feel like now, or as soon as a debt deal is passed, is a great time to buy some stocks that are being beaten up through no fault of their own. FWIW, I'm looking at buying some Verizon, AGNC (mortage reit....risky I know, but their dividend has been steady), Ford, ANR, maybe sirius, and possibly some cisco, GE, or intel.

[mcfroggin]

I'll just be in honest and say that I don't particularly care for those mutual funds. They are basically hemorrhaging money left and right. I'd be searching for a new advisor.

If I were you, I would start investing in better mutual funds. I prefer to stick with Vanguard, Fidelity, and T Rowe Price. Vanguard is usually my first choice, but the others have a few that I like.

After you sock a good 10% of your income into quality mutual funds each year and you have more money that you want to play around with, invest the leftover in stocks that you see being a quality investment. That makes it safe and fun.

Just my opinion on the matter. I'm not a finacial advisor - just offering free education based on my experience.

[dczech09]

What the financial industry does not want you to know is that technology and innovations have made it possible (and safer) to go about investing on your own. Several years ago, a financial advisor was pretty much a necessity. These days, financial advisors are no longer necessary.

I strongly believe that the best person to give you financial advice is yourself; all you need is some knowledge and basic education.

With that said... you pointed out that those funds are losing money. So, do not put more money in a losing horse. Nuff said. There are PLENTY of mutual funds out there that are producing solid returns. I have funds in my Roth IRA that have produced over 20% return last year.

The big problem with financial advisors these days is that they really cost more than they are worth. There is really nothing that they do that you cannot do on your own. These so-called experts can also be very expensive.

[krantcents]

If I were you I would take some time to learn a few things about investing. A good book to start with is "John Bogle on Investing" He started Vanguard Mutual Funds. After you learned a few things about investing, start slowly with a broad diversified index fund and build from there.

[DRILLINDK]

Don't listen to the adviser anymore. More than likely he's probably getting some sort of kickback on the managed fund. I'm not an expert, but I'd advise you to stick to mutual funds. As mentioned earlier, Vanguard has a very good family of no load mutual funds.

The problem develops when individuals try and over-manage their investment accounts. It sounds like you have inherited a considerably large amount of money. I would tend not to look too much at the return, but focus more on quality and consistency of the fund. Stick with Vanguard for no load, or something like American Funds for a managed fund.

[iracer7]

The Legg Mason funds are what my grandfather has invested in, and would like me to continue to invest in...I don't think they were the advisors' picks. HLACX started out doing well last year when the fund was created it started @ 9.81 and 11.76 in May before starting to flatten out.

[bennkar]

I may not be an "expert", but looking at the price chart for HLACX it looks to not be doing much better or worse than the market as a whole. You do know the market has been loopy lately? You can't expect HLACX to go up forever while the market is flat or worse, unless you invest in some riskier funds that could buck the trend. Of course with more risk comes a bigger chance of doing worse than the market. That's why your grandfather is concerned, though he probably would be ok if you explain you will be going to other respected funds like the ones mentioned previously. Just point out the expense ratio at the current fund is bad and you want to improve on that, your grandfather will hopefully understand. (According to MSNMoney, its 1.74%)

[Petunia 100]

Personally, I steer clear of commissioned advisors and expensive actively managed mutual funds whenever possible. The only value an advisor offers so far as I can see is if they discourage you from reacting to market conditions. Time and again, people want to sell after market corrections and buy back in after market advances. People want to chase what is hot, selling what is out of favor. Selling low and buying high is an extremely expensive mistake and if you can't avoid it on your own, then paying an advisor is worth it. If you have the discipline to simply make a reasonable plan and follow it, then you don't need to forfeit all of those fees.