Is DIY Investing A Prudent Strategy?
Dalal Street Investment Journal|September 14, 2020
Is DIY Investing A Prudent Strategy?
While the ‘do it yourself’ kind of investment process may help you avoid paying fees to financial advisers, there may come a time when you are unable to manage your portfolio, especially at the time of a financial crisis, as has been the case in recent times due to the ongoing pandemic. DSIJ takes a closer look at the pros and cons of this issue

There are many investors who feel that the ‘Do It Yourself ’ (DIY) kind of process helps them to avoid the fees and charges of a financial adviser. Indeed, from the cost point of view, DIY seems to be a prudent strategy. However, is it just the cost that you should focus on or should you also dive deep to understand the things that you get for that cost? And these days, thanks to robo advisors, DIY investing is catching the fancy among many investors. Initially, this was adopted mostly by tech-savvy IT professionals but is now being followed by many. Yes, it does feel nice when you have total control over your investments. And though DIY investing is not a new phenomenon, it has gained a lot of traction recently.

DIY: Wise or Unwise?

It is indeed good if you can save money without compromising on your investment experience. Saving on fees that you need to pay to the adviser is one thing and better investment experience is another thing. In this article, we will try to find out whether or not DIY investing is a prudent way of investing for the layman. Honestly, managing your mutual fund investments is not rocket science. Adopting a few of the time-tested rules, understanding your financial goals, disciplined investing, and having control over your emotions are some of the characteristics that a DIY investor should possess. However, for some or the other reason, most of them seem to mess up their investments. Though anyone can be a DIY investor, history shows that not everyone succeeds.

Further, with easily available information online, many people are getting increasingly inclined towards DIY investing. In fact, these days Google has turned out to be a financial planner for many. Many in this segment believe that each and every bit of information put forth by Google is the final word. But is it really? Only having information about various investment products is not enough and never will be. When things get out of hands, experience, and the right perspective is required, which cannot be learned just by reading things or searching the web.

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September 14, 2020