Should I manage my own investment portfolio?

Posted by Creekmur Staff on 9:00 AM on March 11, 2021

canstockphoto22981737We live in a "do it yourself" world. There are television networks and countless websites dedicated to learning how to "DIY" tasks that previously one would pay to have done for them.  

Investment management is no different. The very important task of managing your life savings has become "do-it-yourself" for many investors. As with other areas of DIY, there is no shortage of information available to help aspiring investment managers choose investments for their portfolios. Detailed information about securities and real time performance tracking is readily available at no charge.  Individual investors have many options for self-investing. So, the question to ask yourself is not, "Can I manage my own investments?", but "Should I manage my own investments?"  

If you are considering becoming your own investment manager, there are three crucial questions you should ask yourself.

1. Do I have the time to devote to this task? Are you willing to invest the time needed to research investments, to develop a strategy, and to continually maintain your portfolio? With a task as important as this you will want to continually educate yourself about current events, investment strategy, changes in tax law that may impact your investments, and many other topics.  You may feel that you have the time, but you should also consider if this is how you wish to use your time. Are there other other areas of your life that you need to prioritize? Relationships you wish to grow? Hobbies you wish to develop?

Read more about the Creekmur Wealth Investment Process

 2. Do I have the talent to do this well? It's no secret that we all excel in different areas. Honestly assessing your skill level is very important if you plan to be your own investment manager. You will need to have the ability to read and understand investment prospectuses, and even more importantly, you will need the ability to distill the numerical facts to be sure that you understand performance data, fees within the investment, and more. 

3. Do I have the temperament to be a good manager of my own funds? Being a good investment manager often requires you to act in the opposite way of your feelings. As Warren Buffet advises you must be "fearful when others are greedy and greedy when others are fearful." When it comes to ones own money, this is often easier said than done.

Ask yourself if you will be able to manage your emotions in the face of market turbulence, scary news headlines, political bias, and more. Studies consistently find that investors often "show a lack of knowledge and/or ability to exercise the necessary discipline to capture the benefits markets can provide over longer time horizons."1

If in answering these questions you're beginning to feel that you may need some professional input for some or all of your investment accounts, give us a call. We're here to talk and help you make this important decision.

Contact our office!


Topics: Investing, Investments and risk

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