When faced with the choice between investing on your own or hiring someone else to call the shots with your hard-earned money, it is no surprise that many choose to go it alone. While investors’ memories are short, the asset management industry has still not recovered the trust it lost in the latest crisis. Even if people think the industry’s ethics are intact (which they don’t), the competence of those with authority over others’ assets is in significant jeopardy (as it should be).
But is managing your own assets really the right choice for you? It’s a very important question and one that few people spend enough time thinking about. First, there are ways to discern good asset managers from bad so you don’t have to suffer unethical or incompetent management (see our shortpaper on Evaluating Investment Firms). Second, and perhaps most relevant, is that managing money requires significant time and know-how if you are to do it properly. It isn’t something to take lightly, especially if your asset base is significant.
Our latest shortpaper discusses the issues involved with do-it-yourself investing. It is not our opinion that investors should always hire a portfolio advisor. It is our opinion, however, that investors need to know what they are getting into before taking on DIY responsibilities. Too much is on the line, and it’s far too easy to make mistakes that can cost dearly. Armed with an understanding of what properly managing a portfolio entails, investors can make the right decision for themselves and their assets.
To read our shortpaper on the subject, click on this link: DIY Investing