We’re wondering if we should diversify our investments by hiring multiple advisors with different companies, so we won’t have all our eggs in one basket. Your thoughts would be appreciated.
I would get one advisor, and I wouldn’t invest all my mutual funds in one fund. Virtually all mutual fund advisors can sell pretty much any mutual fund, and you can buy an array of different mutual funds from different companies through one advisor. That gives you diversification. So, there’s really no advantage in having multiple advisors, unless you don’t trust someone’s advice. And if you don’t trust someone’s advice, why are you working with them in the first place?
I personally have one financial advisor, and I trust that person. Still, I ask lots of questions and make sure I understand everything that’s going on with my money and the investment before making a decision. Why are you recommending this? What is it about them you like? Show me the fund and how it compares to the S&P and other funds in the same category. If you approach it this way, and again, you have one advisor, it’s a learning process and you become a more educated investor. Plus, after a while you can create your own diversification.
Never put money into something you don’t fully understand!
* Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 16 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.