By: Jeff Bullock
Should I DIY my Investments?
I get asked all the time if a DIY approach to investing is the right method. There’s no clear-cut answer. For some with an investment background or education, it might make sense. For others, hiring an advisor is really the only way to create peace of mind. For those who go about the DIY approach, generally it’s a game of trade-offs. The most common trade-offs revolve around the time commitment, cost, access to trusted help, financial understanding, and deal flow.
While there are many ways to approach your money management, here are three things to think about before you DIY your own investments:
- The best-trained pilots need a co-pilot. The best quarterbacks in the NFL need a QB Coach. Even if you feel comfortable with the investment landscape, does it makes sense to have a co-pilot, especially if that co-pilot is up-to-date on industry news, landscape and innovation?
- I meet with many people each year who are fully capable of taking a DIY approach to their finances, but generally due to their busy schedules, they aren’t able to dedicate the proper amount of time needed to make the best decisions. In many instances, the purpose of a co-pilot is to ensure the best decision is made, not just a good one.
- Contrary to some thinking, there is a ton of innovation happening in the investment world. New products and better ways to get access to certain asset classes are being created and rolled out each year. A great advisory team will be meeting with industry partners regularly to stay ahead of the innovation curve.
- Deal flow and access to opportunities can be a big trade-off when taking a DIY approach. Most financial institutions operate through “channels” to distribute their products and investment opportunities. In many instances, certain investment opportunities are only available through an advisor because that is the only channel by which the opportunity is being distributed.
Is it cheaper to DIY your investments? On the surface, it may feel that way depending on your approach, as long as you are willing to accept the tradeoffs.
For example, 2022 has obviously been a volatile year in markets. However, there are many investments that have positive returns this year, but are only available through the advisor channel, and can’t be accessed by the DIY investor. These investments have been an anchor to our portfolios during these volatile movements. My job is to help people make better decisions and continuously improve. If being the pilot or co-pilot through your financial journey can help you make better decisions, then perhaps there’s a place for an advisor in your life.
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