Finding a trustworthy financial advisor or choosing one of the best robo-advisors requires time, effort, and discernment. A good financial adviser will design an investment strategy, implement it, monitor your portfolio, and rebalance as needed.

Conventional wisdom says you should diversify your portfolio to mitigate risk. However, great investors reject this notion and focus on maximizing return in a limited number of stocks.

Defining Your Return Goals

An investment advisor can be a substantial ROI compass, helping you navigate your return goals with an acceptable level of risk. Before hiring an adviser, ask about their fees and structure. These arrangements can create conflicts of interest and may influence their advice.

Having quantified your investing goals, you and your advisor can determine how much to save to reach them and what rates of return are realistic given those savings requirements and your risk tolerance. Given these constraints, if your goals are unrealistic, you’ll need to decide whether to scale down the goal or find another way to fund it.

Then, your advisor can help you establish a portfolio that matches your investment goals, short-term needs, and risk tolerance with your desired asset allocation and tax-sensitive strategy. The result is a plan that will serve as a guide for future decision-making and that may be revisited as your needs change.

Assessing Your Attitude to Risk

Knowing what level of risk you are prepared to take with your investments is essential. More risky investments offer the potential for higher returns, but they also come with a greater chance of loss.

For instance, an investment advisor Frederick Baerenz will help you determine the appropriate risk level for your financial situation and goals. They will use various methods to assess your attitude towards risk, including survey-based measures that ask individuals to rate their willingness to take risks on a scale of 1 to 10.

The results can be used to identify your investment risk profile. An advisor can tailor your portfolio to match your investment objectives using this information.

While some advisors charge for their services, others are paid by commissions on sales of their products or other sources. Be sure to clarify any conflicts of interest with your advisor before making any decisions. This will protect you from any potential conflicts of interest that could influence the outcome of your investment strategy.

Identifying Potential Investment Opportunities

Identifying potential investment opportunities involves assessing the value and profitability of the investment against your financial goals and risk tolerance. This step also includes examining the company’s funding sources, including short-term loan lines of credit or long-term financing through bonds or equity shares. It’s also important to look at the net income, which reflects the company’s total revenue after subtracting costs and expenses.

An advisor such as Founder of AOG Wealth Management Fred Baerenz can help you develop an asset allocation strategy that fits your risk tolerance and investment horizon. For example, if you have a short investment horizon, allocate more of your portfolio to government bonds, certificates of deposit (CDs), and money market accounts. On the other hand, if you are willing to take more risk, your portfolio could include stocks and other higher-risk investments.

You can ask friends and family for recommendations or search online to find an advisor. If you decide to work with an advisor, check their credentials and fees by reviewing their Form ADV.

Monitoring Your Investments

A successful investment portfolio requires a mastery of the tools and techniques of monitoring. Like a painter with his palette and brush, an investment advisor has a wide range of digital platforms, robo-advisors, financial advisory firms, and analytical techniques.

After assessing your situation, risk tolerance, and financial goals, an investment advisor can suggest various strategies to meet your needs, given your budget and preferences. This process includes regular communication and meetings to discuss your goals, investments, and other concerns.

A good investment advisor will also conduct regular performance evaluations of your portfolio to ensure it remains in harmony with your goals. This may include assessing market volatility, changes in your finances, or new investment opportunities. It could be as simple as determining whether your portfolio is overweight in one particular asset class or region of the world. Then, he can make adjustments to bring everything back in line.