Top Three Professional Finance Tips

There are hundreds of articles out there telling you what to do with your money. Some of them are better than others, but wouldn't you trust a professional financial advisor to tell you what your best options are?

While this is not an investment article, I did take the time to sit down with my personal financial planner and asked him what his top three tips are for a fruitful future:

1) Do not Put all Your Eggs in One Basket

Diversification is the key to a well-balanced investment platform. If you are hesitant about divvying up for new, international, or high-risk accounts, remember that you are balancing these with secure allocations such as bonds and large cap funds. The important thing to remember is that you want to spread your assets around in various baskets, so you can avoid losing all of your money - or not gaining enough - when investing.

Mutual funds are geared to allow just that. To start off, figure out if you are a high-risk or low-risk investor (aggressive or non-aggressive). Then balance your high and low projected returns based on what your advisor tells you would be good investment bets for your style.

2) Be Objective, not Emotional

There was an older woman who refused to invest in anything but bonds. She was convinced that aggressive bids would drain her lifetime of savings. But she was basing this on her emotional response; her father lost everything in the stock market.

But when her advisor convinced her to take on stocks and an annuity with a 7% return, she doubled her money in just a few years. She overcame her fear when she was forced to analyze her situation from an objective view.

If you are afraid or attached to an idea, chances are you won't be smart about where your money goes. Sometimes it's okay to risk something that goes against your emotional hesitancy, because emotions can corrupt the logical aspect of financial planning.

3) The Counter-Intuitive Principal

Most of us freak out when our stocks dip, and opt to sell. But the trick to beating the game is to sell when your stocks are high, and buy when theyre low. This seems to go against your better judgement - why sell when I'm making a bundle? But professional financial advisors know that high stocks have the potential to crash - or at least dip back down after a big peak. And low returns tend to swing back up with the turn of the market whim.

Sell your stocks when they hit big, and stock up on those that have hit a low. Of course, talk to your professional planner before making any big jumps.