Survey shows investors with advisors are more confident they’ll retire with enough money

At the height of the Dutch Tulip Market craze in 1637, some bulbs traded for nearly 6 times the average annual salary. Sentiment was largely responsible for the extraordinary price. As with any market bubble fueled by emotions, it burst. Almost four hundred years later, we’re seeing a similar rise and fall with other market bubbles.

Taking emotions out of the equation

Removing emotions from investing has always been a challenge for investors. Consider sound advice that suggests “remaining inactive during a crisis”, for example. When the market bottomed out in March 2009, the investors who panicked and “sold out” lost a large chunk of their savings – while those who remained calm and patiently waited regained most of their losses by 2010.

Calling on an expert

During times of market crisis, the counsel of an expert can be your best defense against succumbing to basic instincts and market trends. Expert advisors are there to help investors from sabotaging themselves by teaching them about investments and how they’re used to reach financial goals.

Armed with financial knowledge and the right plan, most investors buy for keeps and as a result, increase the likelihood of reaping long-term returns. Conversely, those without good planning and discipline tend to be crowd followers, which often entails moving in and out of investments — a pattern that’s costly and detrimental to investment return.

Of course, there are investors who can sift through market news and maintain objectivity. These do-it-yourselfers can also benefit from expert advice. Consider it a way of “double-checking your work”, to borrow a phrase from the classroom.

Sources:     INVESTOR RESEARCH: THE VALUE OF ADVICE – Ipsos Reid May 20, 2010 PricewaterhouseCoopers (PwC) & Leger Marketing, March 2009