A financial advisor cannot see the future

I frequently caution people to consult with an investment advisor(s) before following anyone’s investment recommendations. The reason is simple — everyone has the right to an opinion regardless of how unfounded or nonsensical it might be. A financial advisor is merely another voice, presumably an objective and educated one (although not always), and likely more sophisticated than your next door neighbor or brother-in-law.
Having a financial advisor may make you feel more comfortable, but be careful. Financial advisors are not omniscient. A financial advisor cannot see the future any better than you or anyone else. What he should be able to do is execute a strategy that you otherwise might not be able to do on your own.
Let me use an analogy to illustrate what a financial advisor can and cannot do. Suppose you wake up one morning and hear the weatherman forecast snow and a temperature of 20 degrees for the day. Based on extensive experience, you know how to dress for that weather. You have expertise. Life experiences have made you an “expert” regarding how to dress for the weather. You need no one’s help.
On the other hand, suppose you awake one morning convinced that the economy is going to do ________ (fill in the blank). Regarding such matters, most people are incapable of taking this expectation and turning it into a financial strategy. That is what a financial advisor does. In effect he “dresses” your portfolio for the anticipated economic climate. That is his business. Most people cannot do this despite success in their chosen fields. Nor should they have to or be expected to.
Whether you are dressed properly or your portfolio is properly positioned both depend upon a forecast. If the forecast is wrong, disappointment is likely to occur. While we joke about weathermen, their forecasts are likely to be more correct than either your or your the financial advisor’s forecast of the future. And this is the key point: No matter how good a financial advisor you have, he is a technician who knows how to dress your portfolio for a particular “weather” forecast.
Many people who have financial advisors don’t understand the above point. Indeed, few even know what their financial advisor is dressing their portfolio for. Is it for business as usual, an economic downturn, a recovery, inflation, etc. etc.
I am all for using financial advisors, but manage them properly. You must make sure you and your financial advisor are in agreement regarding your expectations of the future. If you are not in agreement, then have your financial advisor convince you that his forecast is better than yours. If he can’t do this, then have him dress your portfolio for your expectations, not his.
If he is unwilling to do so, change financial advisors. Regardless of who is correct, your financial advisor is your agent and takes directions from you. Don’t let him dress you up in shorts and a tee shirt if you believe it is January.