Your Financial Advisor Ask You to Take Money Off the Table?
You turn to your financial advisor in Los Angeles for advice in all kinds of financial realms—estate planning, retirement, real estate and, of course, investment. Because they have a heavy hand in your financial decisions, it’s important that you trust your financial advisor completely to lead you down a path of financial success.
One thing a lot of people don’t consider when it comes to trust and sound financial advice is how often their financial advisors ask them to take money off the table.
Naturally, your financial advisor will make general investment suggestions, but has yours ever suggested that you cash out on some investments and reallocate that money?
What does “taking money off the table” mean?
The U.S. stock market is extremely unpredictable—every investor knows that. Having money on paper is not the same as having cash in your hand, and a successful stock could take a turn for the worst at any time.
It’s not a good idea to make rash decisions and sell off your shares as soon as the market indicates a potential downturn. However, cashing in on a portion of your investments can be a smart financial decision, especially if your stocks have been doing well on a consistent basis.
The term “taking money off the table” largely refers to gambling, where a player would take some of their accumulated chips off the table and only play with a portion of their money to avoid losing everything. This concept can be applied to investments, as well.
Taking money out of the market and putting it into other (less volatile) investment vehicles could be a smart choice, especially if you’re looking to reduce your investment risk or diversify your portfolio and the market is in your favor.
Why you should hear this advice more…and why you often don’t
Taking money off the table isn’t always the best option, but it certainly is a viable one in certain situations and could make a huge difference in your long-term investment strategy. Even still, a lot of advisors won’t tell their clients to do this. Why?
According to Samuel Rad, Certified Financial Planner in Los Angeles, if clients take money off the table, it could reduce the advisor’s fee income. Ultimately, this could end up serving the advisor more than the client!
A good financial advisor who is truly serving the client’s best interest would and should often suggest that the client take money out of the stock market and reallocate their assets into different investment types, such as real estate or gold.
In the end, this decision could potentially save you from losing thousands or even millions of dollars by reducing your investment risk and “playing” the market in a smarter way. This is the kind of thing a great financial advisor will want for you. When done correctly, not only could it help you financially, but it will build trust and allow you to rely on your advisor’s expertise more easily.
Think about recent meetings with your financial planner in Los Angeles. Did they suggest you take money off the table and reduce your risk, or did they strongly advise against it? If it’s the latter, they may have been protecting their own interests instead of yours.
Schedule Your Free Financial Planning Session with Our Award Winning CFP
Samuel Rad is an award winning fee-based Financial Planner with Affluencer Financial Advisors in Los Angeles, California. Mr. Rad has multiple licenses in the investments, real estate, and insurance fields. He has spent a considerable amount of his career lecturing at universities and companies, on financial topics such as financial planning, retirement planning, and estate planning. He currently lectures at UCLA and West Los Angeles College.