‘I’m constantly losing money on stock and cryptocurrency investments. And I paid for the advice that has given me the information that I’ve used to do this. What can I do?’

S&P 500

3,899.89

+26.56(+0.69%)

 

Dow 30

31,019.68

+197.26(+0.64%)

 

Nasdaq

11,535.02

+86.62(+0.76%)

 

Russell 2000

1,812.84

+14.65(+0.81%)

 

Crude Oil

85.33

-0.40(-0.47%)

 

Gold

1,684.60

+6.40(+0.38%)

 

Silver

19.58

+0.22(+1.12%)

 

EUR/USD

1.0030

+0.0012(+0.12%)

 

10-Yr Bond

3.4900

+0.0420(+1.22%)

 

GBP/USD

1.1440

+0.0017(+0.15%)

 

USD/JPY

143.2560

+0.3500(+0.24%)

 

BTC-USD

19,504.01

+108.87(+0.56%)

 

CMC Crypto 200

447.79

+16.97(+3.94%)

 

FTSE 100

7,236.68

-45.39(-0.62%)

 

Nikkei 225

27,567.65

-308.25(-1.11%)

 

Susannah Snider, CFP

I’m constantly losing money on stock and cryptocurrency investments. And I paid for the advice that has given me the information that I’ve used to do this. For example, I was told to buy SoFi and lost money the whole time when I invested in it. What can I do?

I can hear your frustration oozing through this question. And I get it. After all, what’s the point of paying for financial advice if you’re not going to make money on the guidance you receive?

But before you fire your financial advisor (and you may want to after reading this), it’s important to review reasonable expectations about what a financial advisor can guarantee, how to avoid scams and bad actors and what to expect when it comes to market losses and gains.

financial advisor may help you understand the pros and cons of certain investment decisions.

What Professional Financial Advice Can Do for You

Make sure to find a fiduciary financial advisor.

It’s important to note that no financial advisor can predict the markets. Sure, advisors can use charts and historical models to make educated guesses. But you should view most claims of guaranteed investment returns with a healthy dose of skepticism. Individual stocks and cryptocurrencies both come with a great deal of risk, no matter who’s telling you to buy them.

Instead, what an excellent holistic advisor can do is help you formulate a financial plan that weathers market downturns and tamps down on exposure to risky or speculative financial products.

That financial plan may include stocks that do, at times, lose money. It could even include cryptocurrency investments that only comprise a reasonable part of your portfolio (read: money you’re willing to lose). But your funds should be diversified and placed into different buckets that allow your money to survive market downturns without bankrupting you.

For this assistance, you’ll typically pay a fee, often somewhere around 1% of assets under management (AUM). You may alternatively pay an hourly fee or per-project fee based on how your agreement is structured.

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisers that can help you achieve your financial goals, get started now.

The Importance of Finding a Fiduciary

When finding a financial advisor, I typically recommend working with a fiduciary. That’s someone who is legally obligated to act in your best interest.

There are some shorthand ways to determine whether you’re working with a fiduciary financial advisor. Certified financial planner (CFP) professionals must be fiduciaries. Advisors listed on SmartAsset’s platform are also fiduciary advisors. You can also ask when interviewing potential financial advisors whether they’re fiduciaries and if they act in that capacity at all times.

I like to share this information because anyone can call herself a “financial advisor,” even someone hawking risky financial products on YouTube or selling shares of an investment on Facebook. If you’re getting advice that seems off, consider who you’re getting it from and whether the person is required to act in your best interest when making that recommendation.

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisers that can help you achieve your financial goals, get started now.

Identifying Scams and Fraudsters

A financial advisor can’t guarantee your investment will always stay in the black.

While it’s not necessarily bad form for an advisor to suggest or pick individual stocks, I wonder if these selections were presented to you clearly. Fiduciary financial advisors can’t protect you from all market losses, but they should suggest investments that complement your overall portfolio and caution you against overexposure to certain assets.

Any advisor worth his or her salt isn’t going to tell you to invest more than you can afford in a single cryptocurrency or security.

Checking an advisor’s record for disciplinary actions or complaints can help you feel identify bad actors in the space. A few ways to vet your financial advisor include:

Use FINRA’s BrokerCheck. Enter an advisor’s or firm’s name into BrokerCheck, a free tool, which will give you arbitrations and complaints, licensing information and regulatory actions.

Use SEC’s Investment Adviser Public Disclosure. This tool, which ties to BrokerCheck, also allows you to view information about an investment advisor and its business operations.

Check their credentials. Licensing such as the Series 7 allows advisors to sell securities. Plus, CFPs and chartered financial analysts (CFAs), for example, must pass a series of educational hurdles and adhere to professional standards.

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisers that can help you achieve your financial goals, get started now.

Can Your Financial Advisor Protect You Against Market Losses?

Short answer: No. A financial advisor, even an ingenious investment manager, can’t guarantee that your portfolio will always be in the black. Unless you’ve got your money squirreled away in a few savings accounts or certificates of deposit, you’re likely going to ride the market’s gyrations, no matter who’s giving you investment advice.

Some things an advisor can do include:

Help you design a diversified investment strategy with a risk profile that matches your investment time horizon and stomach for risk.

Assist in placing money into “buckets” for short-, medium- and long-term goals.

Suggest investments or strategies that can help you meet your financial goals.

Give you the freedom to play around with money in individual investments. But a good advisor will encourage you to only “gamble” with money you can afford to lose. Many advisors suggest that cryptocurrency, for example, take up no more than 2% to 5% of an investor’s portfolio.

Bottom Line

Paying for advice doesn’t guarantee that you’ll avoid all market losses. But if you’re feeling squeamish about the way these investments were presented to you and how they were described, it’s worth reviewing your financial advisor’s credentials and assuring you’re working with someone legit.

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisers that can help you achieve your financial goals, get started now.

Investing Tips

If you have questions specific to your investing and retirement situation, a financial advisor can help. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

If your investments pay off, you may owe the capital gains tax. Figure out how much you’ll pay when you sell your stocks with our capital gains tax calculator.

Susannah Snider, CFP® is SmartAsset’s financial planning columnist, and answers reader questions on personal finance topics. Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.

Please note that Susannah is not a participant in the SmartAdvisor Match platform.

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisers that can help you achieve your financial goals, get started now.

Photo credit: ©Jen Barker Worley, ©iStock.com/Jirapong Manustrong, ©iStock.com/Viorel Kurnosov

The post Ask an Advisor: I’m Losing Money on Investments. How Can My Advisor Let This Happen? appeared first on SmartAsset Blog.

Advertisement

SmartAsset

$1.5 Million Earns This Much Annually

Whether you’re saving to retire, or have just come into a nice windfall, knowing where to put your money to grow it is essential. There are multiple ways money can build interest, but how much interest does $1.5 million earn per … Continue reading → The post How Much Interest Can $1.5 Million Earn Per Year? appeared first on SmartAsset Blog.

SmartAsset

My Kids Inherited $5 Million. How Should They Handle It?

My children have inherited $5 million of stock from their father (whose estate has not yet been dispersed after 11 months) leaving them with a 30% or so loss of value over which they have had no control. Is there … Continue reading → The post Ask an Advisor: My Kids Inherited $5 Million. How Should They Handle It? appeared first on SmartAsset Blog.

Barrons.com

Bitcoin Trades Near $19,000. Why a Big Move May Be Coming.

Bitcoin, the world’s largest cryptocurrency, is falling ahead of the Federal Reserve meeting this week and on worries that aggressive moves by the central bank could lead to recession.

The Wall Street Journal

How to Survive the Next Market Crash

Fund manager Mark Spitznagel, who earned a fortune when stocks cratered in 2008 and 2020, has some surprising advice for how ordinary investors can brace for the next big one.

SmartAsset

84% of Retirees Make This RMD Mistake. Are You One of Them?

Though retirees are only required to take a certain portion of their retirement savings out as distributions each year, a study from JPMorgan Chase shows that there is likely good reason to take out more. A withdrawal approach based solely on … Continue reading → The post 84% of Retirees Are Making This RMD Mistake appeared first on SmartAsset Blog.

TipRanks

Fisker, Rivian or Lucid: Which EV Stock Is the Better Buy?

Everyone knows by now, traditional ICE vehicles are on their way out, fast driven to obsolescence by electric vehicles (EVs). In fact, according to Needham’s clean tech analyst Vikram Bagri, EV adoption is “progressing faster than expected.” Realistically, this is not much of a shock considering the macro background. “The fundamental landscape for EVs is more constructive than ever with elevated gas prices, government support, and improving availability,” Bagri noted. “Though we expect to see so

Investopedia

10 Important Cryptocurrencies Other Than Bitcoin

Altcoins can present themselves as modified or improved versions of Bitcoin. Given Bitcoin’s volatility, you may want to watch these 10 alternatives.

Bloomberg

Here’s How Much a New Monthly Mortgage Payment Has Surged in 10 US Metros

(Bloomberg) — Mortgage rates in the US have soared alongside Federal Reserve rate hikes. According to Bankrate, the average 30-year mortgage now stands above 6.3%, the highest since 2008.Most Read from BloombergSouthwest Mexico Struck by 7.5 Magnitude Earthquake, Buildings Sway in CapitalHome-Flipper Opendoor Hit With Losses in Echo of Zillow CollapseGrand Theft Auto VI Leak Is a Shock to Video Game Studio RockstarBiden Says He Warned Xi of Investment Chill If China Backs PutinAnd while there a

SmartAsset

Robinhood vs. Fidelity vs. Vanguard: What to Know

With Fidelity and Vanguard, investors can access traditional, full-service investment platforms that allow you to individually manage your own account. Robinhood, by comparison, offers a very different experience geared towards mobile users. Here’s how they stack up. If you prefer hands-on … Continue reading → The post Robinhood vs. Fidelity vs. Vanguard appeared first on SmartAsset Blog.

SmartAsset

What To Do After You’ve Paid Off Your Mortgage

For many homeowners, one of the milestones on the path to financial independence is being able to pay off their mortgage. With typical mortgages lasting 30 years, it can take a long time to meet this goal. But what happens … Continue reading → The post What Happens When You Pay off Your Mortgage? appeared first on SmartAsset Blog.

Motley Fool

3 Once-In-a-Generation Buying Opportunities In the Nasdaq Bear Market

Things have been even worse for the tech-centric Nasdaq Composite (NASDAQINDEX: ^IXIC), which has lost as much as 34% of its value on a peak-to-trough basis since hitting its closing high in November. The magnitude of the Nasdaq’s decline has kept the widely followed index firmly entrenched in a bear market. The first buying opportunity you may never see again is the chance to load up on shares of semiconductor giant Intel (NASDAQ: INTC) below $30.

Reuters

TREASURIES-10-year yields highest since 2011 before expected Fed rate hike

Data last week showed higher-than-expected consumer prices in August, dashing hopes that price pressures would ease. It also made it more likely that the Fed will hike rates by another 75 basis points when it concludes its two-day meeting on Wednesday. Traders are now pricing in an 81% chance of a 75 basis points hike and a 19% likelihood of a 100 basis points increase.

Leave A Reply

Your email address will not be published.