Robert A. Mecca, CFP®, MBA
Vice President, Wealth Management
September 17, 2020
Did you ever count the number of do it yourself TV programs and internet applications? Don’t bother, as there are more than you can imagine. DIY holistic fitness, DIY self-health diagnosis, DIY weddings, and much more.
The one that catches my attention is the plethora of DIY house remodeling programs. In a 60-minute program, including commercials which consume about 18 minutes, we can watch how a house is purchased, remodeled to perfection, and then sold at a huge profit… all by doing it yourself. They make it look so easy. What about the preliminary planning, sleepless nights, headaches, and frustration when things go wrong? Then there is the significant editing required to ensure the program fits into the time slot.
As a society, we have become enamored with DIY projects. Some of them – especially smaller projects – may be OK to tackle. For those professionally experienced or educated in a specific area, it may make sense. DIY can be rewarding IF you understand your limits. There is a fine line between the astute and ignorant. The former realizes his/her limits. The latter does not.
This is especially true when it comes to finances and investing. Unless you have a degree in this area, significant experience, can devote the essential time required, have all the mandatory software resources, and can approach the project without emotion, then it is best to leave the job to a qualified fee-only professional.
As professionals, we need to pay close attention to key elements daily. Here is just a small example when it comes to investing that needs to be examined…
Technical charts of the various markets, stocks, and ETFs, 20, 50, and 200 day moving averages, fundamental issues including p/e ratios, dividend yields, management, industry, federal and local regulations and laws, interest rate movement, relative strength, MACD, stochastics, market volume, advancers vs. decliners, moving average envelopes, Bollinger bands, company EPS, alpha, beta, standard deviation, R2, company profit margins, momentum, Sharpe ratio, fund expense ratio, types of mutual funds, pertinent tax laws, geopolitical issues, turnover, SEC yield, 10 year treasury yield, cash alternatives, commodities, bonds, foreign markets, US dollar, growth vs. value, capitalization.
Did I lose you? Is your head spinning? There is much more that I could have included. I did not go into present value, future value, cost of money, etc. The key point is that finance can be complicated. Partnering with qualified, certified, experienced professionals is smart, especially during these times.
In the past, I authored numerous financial articles. One that comes to mind is an article I wrote pertaining to mutual funds. I specified that it is vital to partner with an advisor who has “scars”. The financial editor asked me what this meant. My response was that it is prudent to tap the services of a professional who personally experienced the pains of difficult economies, bad markets, and difficult people rather than read about such things in a textbook. Through personal experience, one can be ready for the future, having a better feel for what to do and for what might not work. Clearly, each historical situation, like this virus, has its own character. However, the more one experiences tough times, the better-equipped one is to successfully navigate the course.
Investing is not an exact science. There is no traffic signal with green stating to go into the market and red saying to sell. With countless moving parts to analyze, decisions to determine proper strategies can be complicated.
Do not misconstrue the lack of action as inaction. In my years devoting hours upon hours of detailed analytical diligence, many times my conclusion has been to temporarily hold. Hold off buying that stock that I have been following, but with respect to which I feel it is not quite the time to buy. Hold off totally selling out of a five-star mutual fund. Hold off selling that corporate bond. Hold off investing a big portion of the large cash position.
The professionals at StrategIQ Financial Group are very aware of what is happening in the markets. Brad Rathe, our Chief Investment Officer, is doing an excellent job. Please don’t make a DIY decision. If you have concerns or questions, it is best to talk with your designated StrategIQ Financial Group advisor.
Unless otherwise expressly indicated, the opinions or views expressed in this article are the author's own and do not reflect and may differ from, the opinions or views of StrategIQ® Financial Group, LLC or others within StrategIQ® Financial Group, LLC, including its officers, managers, owners, employees or other service providers.