Until these post modern ages, few people did do-it-yourself investment management. With the advent of increased sources of information, no-load mutual funds, and low-transaction-cost brokerage accounts, more people choose to forgo using an investment advisor and manage their investments themselves.
You are a smart and intelligent person and probably capable of doing a lot of your own investing, but since we all have different skill sets and personality styles, not everyone is equipped to do a great job of it. Some people are motivated to consider doing their own investing because:
- It looks easy considering all of the information available on the internet
- I had a bad experience with an investment advisor in the past
- I feel investment advisors charge too much for their services
- I feel I can do it better myself
I think though before doing it all yourself, it makes some sense to do some self assessment about whether the role of investment manager is a good one for you. Answer the following True False:
- Analytical: I’m an analytical person, I enjoy analyzing technical information and making mathematical calculations
- Not Emotional: I am not emotional about financial matters. For example, if the market had a big one-day drop, I would not automatically panic and move my money
- Decision maker: When presented with all of the important facts, I am able to make a decision without over deliberation and analysis-paralysis
- Instincts: I have a very good history of investments and avoiding bad decisions, including schemes
- Time: I have ample time to make my own investment analysis, I have time for this to be one of my main interests
- Research:If I am not already skilled in investment analysis, I am willing to devote many hours to take courses and read books about investment theory and practice
