The financial advice is a much broader discipline than investments. The person may be very good for putting money, but not quite good at planning. Or vice versa. Carry out an orderly program also requires knowledge of accounting, insurance and taxes. Therefore, it is considered the “art” comprehensive vision of all these aspects so as to maximize results. Find someone who can assist in all aspects.

2 – Hire professional advisers only and credentialed

Avoid amateurs. There certify their professional credentials. In the United States, are more common in Argentina, but they are. The title of CFA or CIIA among others, is a guarantee of professionalism. The country may request that your counselor will show specific investment education he had as courses, studies, etc. Another important factor that has a vast experience in the finance industry.

3 – Compare different alternatives

It is important to take a broad view of the different alternatives. When hiring a financial advisory interview at least three different. In this way, you will learn several different options and may elect the most in convincing and he can deliver the services they need. Many times, not only about hiring a professional, but also to understand and have an affinity with you.

4 – A referral may be a good starting point, but not only is it

If the consultant has been recommended by a friend, relative or colleague can be a plus. But make sure it is needed the same service as the person who suggested it. Often, one needs a different professional. So, remember the above advice, compare different alternatives.

5 – Understand how your adviser receives your fees

There are three ways in which advisers receive income for their service. The first form, known as fee-only, is by paying it does the investor. The second is exclusively through the adviser receives commissions on products sold, not the investor. And third, a mixture of the two sources mentioned. Is within their rights to demand to explain how they get their fees for their work.

We know that investing in stocks or real estate is a very profitable investment alternative for medium and long term. As discussed in previous notes, on average you can expect an annual return of 11% average if I invest in a basket of the largest stocks in the United States. And the real estate returns are very close to this level.

But as we know, these returns are not a straight line, stable and calm, are very variable.The volatility of the markets, which currently is very high, causes the returns are variable from year to year. Some positive and some negative years, giving the average mentioned, but with many variations.

Why is this?
The answer is implicit in the logic of capitalism. Two events that exist in capitalist economies get a little complicated the picture:

* Business cycles
*The Process of Creative Destruction

Understand how these two phenomena will give me peace of mind knowing the context in which we operate. And I will make investment decisions more effective.

Type of investor: This advice is important for active investors and long-term investing in stocks and real estate

Risks: It is very difficult to predict the movements of the cycles and anticipate the winners of the process of creative destruction

Potentiality: I am a general framework that explains many movements, therefore, prevents me from making irrational decisions