Is part of the job of financial advisors to predict the stock market's and economy's directions?

Financial advisors help people create a diversified portfolio based on their client's age, ets, risk tolerance, and retirement goals. Should they also try to predict such factors as the long term 1 year out and farther interest rates, stock market performance, bubbles such as Housing and the Nasdaq, etc. , or should they instead try to create a portfolio without any such umpstion? PS You spam me - > I Report Abuse. That's the way I roll

Responses:

LOL, they definately do not predict. Only there to diversify which that umption has been disproven in this market
Hehe, judging by what I have seen of your answers, tough to teach anything to you, but here goes. A financial advisor has no ability to predict whats going to go up or down, he can merely get you into the greatest number of et cl es to diversify away market risk. He should always make sure he advises you against catastrophic events - through life insurance, health insurance, disability, etc. Every client is different, and investments should be based on a slew of factors - investment objectives being determined ultimately by the indvidual - he should educate you on the options available to you. Predicting future events is tough - we may see enormous deficit spending now - but who can calculate the 45% chance of inflation, 37% chance of deflation, a terrorist attack in Pakistan, China decides it has to slow its exports, allow its currency to strengthen, stop buying US debt, interest rates are froced to rise and so forth? There are too many possibilities, even the statisitical experts can only point to probabilities, and they all point in different directions anyway. An ideal portfolio is the one that best suits the client, which the client picks, based on the information the advisor presents to them - a knowledge of tax regulations affecting accounts is important, but trying to guess the market is unethical when dealing with people who cannot tolerate risk
Yes, they are supposed to predict that. The only exceptions are financial advisors working with companies like Dimensional or Vanguard who go with a buy and hold approach. Those advisors also do not charge as much, either. Of course, very few financial advisors can actually predict anything accurately and beat the market after fees and whatnot

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