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Very often investors will hear their advisor suggest investments or strategies and despite not understanding what the advisor is proposing, will nod and smile for fear of appearing ignorant. While this is a natural human instinct, it is not a best practice. The exceptional Schwab ad “Curiosity Blindspots” perfectly illustrates how even highly sophisticated people cease to ask probing questions when it comes to money and wealth.
One way to get more comfortable with asking questions is to subscribe to the very same research services that advisors use. These are independent and trusted services that are available to anyone, are relatively affordable, and can provide deep data about various investments from mutual funds to stock to bonds.
There are many such services available including Morningstar, Value Line, Zacks, Standard & Poor’s and others. There is overlap in some of these, and each offers unique features and depending on your portfolio construction and interests, just one of these will normally suffice for the purpose of self-education and cross referencing.
For example, if you are wondering why a particular mutual fund is in your portfolio, these services can tell you how that fund has performed relative to the major indexes and to competing funds, as well as how competitive the expense ratio is relative to other mutual funds like it.
Investors that are highly interested in income can benefit as research providers allow you to search literally thousands of stocks that pay dividends and then further screen by dividend yields. In fact, an investor can screen a stock by dozens of criteria for many of these services.
What is also an advantageous offering by most of these services is that their staff analysts provide recommended short lists of securities and portfolios they feel are good values. Like any publisher-recommendation, your personal situation must always be factored in and this is what your advisor does, but these analyst picks can be great conversation starters and discussion points with your advisor.
For example, if one of the analysts writes that a certain stock which has been having record profits for the past number of quarters, but its stock price has not moved accordingly believes it’s a great time to buy the stock, that could be a very interesting conversation to have with your advisor.
These popular and trusted research services are not a replacement for your advisor, to be sure. However, by subscribing to one of them and spending a little time exploring, you will better prepare yourself for deeper engagement with your advisor.
Like the Schwab ad deftly shows, having a curiosity blind spot is not ideal, but independent data providers can allow you to get more comfortable with being curious privately and at your own pace.