January is a time for reflection and planning. While it’s easy to admit we need to lose a few pounds or watch less TV, matters related to our skills and competence strike closer to home, i.e. closer to our ego. This is where it gets delicate, and also where real learning can lead to genuine progress. Courage always precedes radical honesty, especially when WE are the subject.

In the last ten weeks since I started writing again for the Money Talks blog, this is the kind of beautiful and painful honesty I’ve heard from readers who have contacted us.

“I/we started self-managing in 20XX because our advisor/broker didn’t prevent big losses when X or Y happened, and we felt like our trust was betrayed. Since then, I’ve done pretty well investing in some things, especially if it’s related to my work, but then I get busy with work or family life, and I don’t follow my own rules. Sometimes I struggle with patience and sell too soon. Other times I freeze when a position goes south and I excuse it because I like the company or the sector. That happened in gold/oil/technology stocks, and I sat there and watched $ X just evaporate. I know how this works intellectually, but my emotions take over when it’s real money in real time. And sometimes – like now – I feel like a deer in the headlights, too scared to get invested again because the world looks like it could come unravelled any second. I’ve made some very costly mistakes over the years and we cannot afford to keep making mistakes with our retirement funds. I don’t enjoy doing it anymore, I’m not that good at it, and we’re looking for someone we can trust with our life savings. What makes your firm different?”

All these people have real courage. Some folks are much harder on themselves. It’s both a privilege and a responsibility to hear their stories. Helping real people solve real pain and avoid repeating costly mistakes is what we specialize in…and it’s why we’re passionate about what we do.

Below are some questions for you to ask yourself…and maybe even share with your spouse. This is my Gift of Radical Honesty to those with the courage to unwrap the package. What you choose to do with the gift is completely up to you.

• Do I genuinely enjoy managing our portfolio? Is it deeply satisfying, given the time I’ve invested?
• Have I really made additional gains (or prevented additional losses) that more than make up for the investment fees we’re saving by self-managing? Does this extra return (or loss avoidance) fairly compensate me for my time and energy?
• Is keeping up with market information still fun and stimulating, or has it started becoming more of a burden? Is it bordering on being an unhealthy obsession?
• Have I been “beating the markets” consistently? Is this a realistic or necessary expectation?
• Does the sense of being independent and “in control” outweigh the work required, or is “the thrill” gone?
• Have I been generating the rate of return our family requires? Do I know the return we actually need to achieve our goals?
• Am I able to consistently shut off my “investment mind” and be fully present at work, engaged with family and friends, with enough time left over for personal pursuits? Or do the markets come flooding back into my consciousness whenever I start to slow down?
• Is managing our own portfolio feeding the healthiest parts of me, or has it shifted to highlighting my weaknesses (I’ve lost enthusiasm for this, I’m not very good at this, I keep making the same mistakes, etc.)…and it’s getting painful?
• Do I find myself resenting the time it takes to properly manage our money? Or have I gradually stopped watching things closely and then had things go sour because I wasn’t paying close attention?
• Is the idea of admitting to someone that I need or want help too painful to bear, so I’m just going to try harder, buy another research subscription, and put more time into it…or is it time to ask for help?
• Is managing our own portfolio making me – and those around me – healthier, wealthier and happier?

Please watch Mike’s emails and the Money Talk blog over the next few weeks. I’ll be following this article up with questions to ask yourself about how you might select a new advisor, and questions to ask any advisors you might interview for the job.

Cheers,

Andrew H. Ruhland, CFP, CIM

http://integratedwealthmanagement.ca/