Investing – Do It Yourself?

Categories: Invest

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:

  1. Analytical: I’m an analytical person, I enjoy analyzing technical information and making mathematical calculations
  2. 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
  3. Decision maker: When presented with all of the important facts, I am able to make a decision without over deliberation and analysis-paralysis
  4. Instincts: I have a very good history of investments and avoiding bad decisions, including schemes
  5. Time: I have ample time to make my own investment analysis, I have time for this to be one of my main interests
  6. 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
If you don’t answer all of these questions True, then you should probably hire an investment manager. However, either way, it is good for all people to expand their knowledge and awareness of investments and investing. Better-informed people are able to avoid bad investments and investment advisors. They also make better-educated investment decisions working in a team environment with their investment professional.

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