Just last year, Jay got the promotion which he had been waiting for since a long time.  Entire family was extremely happy with his promotion as Jay could now buy a car for his family which was a dream come true for him.  None of the three generations before had bought a car which added an extreme element of pride in him.  Suddenly, in no time, this pride turned around into a huge problem of selection of a car which needed to be solved.  As he looked around his immediate family, there was no help while a few friends did suggest but since this was a big decision, Jay thought it would be best to invest his own time and energy into the same.  Though even this decision was short lived as there were too many cars that were fitting into his budget.

Resulting in a lot of confusion, Jay decided to individually going to each car company and checking the car himself.  Sales people were extremely persuasive everywhere while talking good about their own product and talking down on other company’s products.  This added to a lot more irritation because now it looked a lot harder and he didn’t want to waste his money and time invested in the same.  Fortunately, an old school friend of Jay met him at a restaurant who was an expert and had passion for cars.  Needless to say, rest is history and dream was fulfilled with ease.

Relying on a person who is both expert in his field and has passion for the same, makes those specific decisions easy. If such an example is correct for buying a car, then it certainly makes more sense to rely on an expert while making a choice in buying investments products.  Just like a car, even an investment product will have its own positives and negatives.  As the clutter of information increases on which product to rely on when investing or going the solo way of directly investing in the company through a broker, so does the requirement to rely on an expert to declutter that information.  Technology has been a great facilitator towards connect people and pieces of information which were not easily accessible before and in times to come, it will become better.

So the question that emerges from this is, will this information being increasingly available through technology solves our need of investments? Or rather lets say, would Jay have relied solely on some basic comparisons of cars on a website and book a car for him?  You could say, yes in case the product to be bought was a mobile phone or a laptop, but a car is a dream come true for for him.  Similarly, in buying an investment product also, if they are just bought for a tax saving purpose then it can be bought directly, but when these investment products are purchased to realise a dream in the future (can be children’s marriage, retirement, etc.), it is sensible to have an expert who can handhold till the time that dream is realised.

An investment product is usually made up of many components such as equity (buying shares of companies) or debt (where loans and advances are given to a company) or both distributed as per the person who manages that product.  Ideally, it is the job of your advisor (expert) to sit with these fund managers and understand the psychology and reasons of buying shares or giving loans to companies in the making of that investment product. Second question comes, how do you assess whether he is really an expert or does he have passion for his job.  The answer is simple, just ask him as many questions as possible, it’s the best way to know someone very well. Rather than googling, every possible answer, asking your expert will bring more clarity and comfort in the journey of investments. Infact, the experts in any field usually encourages a lot of questions and answers them till the time everyone is satisfied with it.

We have been habituated to a world which is changing by the hour. We seek advise in most of our decisions everyday, not only to confirm whether the decision is correct or not but also to seek whether we are in the right direction. Similarly, if Jay buys a car today and next month a new car comes with lesser price and better features. Would Jay still be really happy with his decision? What if, someone who has nothing to do with any car company had told Jay to wait for 1 more month? Would that have added any value to Jay’s life?

If your answer is Yes, then why don’t we just do the same for our own hard earned money? Let our money work for us through an expert who will not only provide the right advise but will not be biased towards any particular company.

Would it not save a great deal of our time, by simply taking an advise? Again, if your answer is Yes, then let’s choose an Expert and not merely an investment product.

Image Courtesy : Buzzle