Investing on your own can be really difficult at times. At the same time as some people are blessed with the ability to make the right decisions, there are many who possess the resources and the determination to make successful investments. But, let’s face it, not all of us are well versed with the latest profitable investments. Therefore, getting a financial planner can turn out to be of great value, since they tend to give you insights which would help you stay out of trouble. However, a lot of investors do not know how to use the expertise of the financial planner, simply due to the misconceptions on how they function.

One of the most common mistakes people make, while seeking the assistance of the financial planner, is that they do not need to know more about investments since the financial planner would manage it all. This is actually far from the truth. In order to have a better chance at success, it is imperative that you have some basic understanding of everything that your financial planner is doing. It’s your money and you need to know where it is going. This would help both of you to stay on the same page and set specific financial goals that you wish to achieve.

For an instance, if you are reviewing your portfolio with your advisor and if he advises you to allocate some money in a specific mutual fund, then you mist know the reason behind his recommendation. Research on some of the basic things such as the historical volatility of that specific asset class, the historical returns and find out whether the recommendation would fit into your financial goals.

These are just some of the fundamental questions you must ask your financial advisor, every time he makes a suggestion. So as to keep yourself from getting swindled, you must know about these basic investment principles. Unfortunately, there are quite a lot of investors who would suggest something only because they earn a higher commission by selling those funds. If you are aware of these basic investment concepts, you can save yourself from making such investments.