Why DIY Investing Is Risky (article)

[MrMoneySaver]

"Most people don't attempt to repair their own car or to diagnose a health ailment, but may have built up a false sense of confidence with their ability to manage their own investments."

https://www.msn.com/en-us/money/savingandinvesting/why-diy-investing-is-risky/ar-AAtDQfi

[Mr. Boh]

"Advisors like myself know the rules and use fact-based modules to determine when a stock should be sold."

Wow and to think that I should use a fact based module to know when to sell. I figured I should only sell when I needed to rebalance or when I need the money. I guess I'll run right out and pay an advisor a percentage or two to manage my money.

[Radagast]

That is a poor piece of writing by someone who has something to gain by convincing people that investing is hard. Around here, we DIY as much as possible plumbing and car repair and especially investing.

[surfhb]

"Don't fool yourself into thinking you can correctly call a market top or bottom, as most of the so-called 'experts' cannot do so themselves," Ulin says. "Market timing involves making two distinct decisions – when to sell and when to buy. Many of us cannot correctly make one of those decisions otherwise both." 

These 2 sentences pretty much sums up why you should be a buy and hold index investor

[JAYSLOL]

"Most people don't attempt to repair their own car or to diagnose a health ailment, but may have built up a false sense of confidence with their ability to manage their own investments."

https://www.msn.com/en-us/money/savingandinvesting/why-diy-investing-is-risky/ar-AAtDQfi

When these investment advisors go through a 4 year undergraduate program, take a test comparable to the MCAT, go through 4 more years of professional school, enter into a 6-10 year program similar to a residency & fellowship and then become licensed and board certified professionals required to carry malpractice insurance (and held responsible for their mistakes) - then I may possibly consider using one of their services.  Then again, investing isn't brain surgery.

Lol, good response.  It's too bad financial advisors are mostly glorified sales people with only 2 goals, be your "friend" and make the most commission possible.  I'll keep DIYing my portfolio (and car), thanks, but I'll still visit my doctor.

[Heckler]

"I didn't get the full benefit of the stock market this year as I panicked, I mean was conservative, and sold all of my US stocks."


A quote from a friend two days ago after discussing how his $25/day retire on a shoestring budget travelling the world by bike is going.  And he has an advisor.   

So its risky either way.

[Kaspian]

"I didn't get the full benefit of the stock market this year as I panicked, I mean was conservative, and sold all of my US stocks."

Yikes!!  "Conservative" is 20-40%, not ZERO.  There has to be a different word for going nothing?  ..."I was irrational"?

[BobTheBuilder]

"Most people don't attempt to repair their own car or to diagnose a health ailment, but may have built up a false sense of confidence with their ability to manage their own investments."

https://www.msn.com/en-us/money/savingandinvesting/why-diy-investing-is-risky/ar-AAtDQfi

When these investment advisors go through a 4 year undergraduate program, take a test comparable to the MCAT, go through 4 more years of professional school, enter into a 6-10 year program similar to a residency & fellowship and then become licensed and board certified professionals required to carry malpractice insurance (and held responsible for their mistakes) - then I may possibly consider using one of their services.  Then again, investing isn't brain surgery.

That is a solid answer! Bam! Also, like said earlier, there is much you can DIY. Often it is more about the tools than education (in plumbing, car repairs...) The tools we have now.
Medicine however is about both. Education and tools. Glorified salespeople indeed.

[SeattleCPA]

I honestly think one can boil down a retirement plan (a really good one) into thirteen words:

"$5,500 annually into an IRA or 401(k) invested in cheap target retirement funds"

Okay, sure, you can argue that this plan (which will typically only get someone into the top tenth percentile) takes too long or comes up short.

But something that can pretty reasonably be described with a short phrase seems pretty DIY-able.

[le-weekend]

I am very much right-brained and struggle with even simple numbers and accounting concepts etc. so this is a tough call for me. For now I'm OK with having my 401K managed by my job's program (Fidelity) since I get matching funds. 

Re: self-investing, a few years ago I decided to open an ETrade account and buy a few stocks and get my feet wet. So far my returns seem to be pitiful, but maybe that's because I've only got a few hundred bucks invested. (Please don't laugh at my amounts. I am a financial novice and not anywhere close to FIRE.) 

August 2014 - October 2017: Amount spent on single stocks and trade fees:
$430.

October 2017 Net account value:
$475.

I've only made $45 over 3 years??!?

[Heckler]

That's a ten percent gain btw...

[geekette]

I am very much right-brained and struggle with even simple numbers and accounting concepts etc. so this is a tough call for me. For now I'm OK with having my 401K managed by my job's program (Fidelity) since I get matching funds. 

Re: self-investing, a few years ago I decided to open an ETrade account and buy a few stocks and get my feet wet. So far my returns seem to be pitiful, but maybe that's because I've only got a few hundred bucks invested. (Please don't laugh at my amounts. I am a financial novice and not anywhere close to FIRE.) 

August 2014 - October 2017: Amount spent on single stocks and trade fees:
$430.

October 2017 Net account value:
$475.

I've only made $45 over 3 years??!?

Yeah, that's about 10%, but if you'd invested in the S&P 500 over that time, you would have had about a 25% return.  August 2014, the S&P500 was at 1925.  Now it's about 2575.

You won't hit it out of the ballpark with an index fund, but you would most likely do better with low cost broad index funds than you would with individual stock picking.

[Taran Wanderer]

I am very much right-brained and struggle with even simple numbers and accounting concepts etc. so this is a tough call for me. For now I'm OK with having my 401K managed by my job's program (Fidelity) since I get matching funds. 

Re: self-investing, a few years ago I decided to open an ETrade account and buy a few stocks and get my feet wet. So far my returns seem to be pitiful, but maybe that's because I've only got a few hundred bucks invested. (Please don't laugh at my amounts. I am a financial novice and not anywhere close to FIRE.) 

August 2014 - October 2017: Amount spent on single stocks and trade fees:
$430.

October 2017 Net account value:
$475.

I've only made $45 over 3 years??!?

But why are you dabbling in stocks?  I made this mistake early on.  I should have opened a Vanguard account, bought a market index fund like VTI, and kept buying that market index fund.  That's the simple model that everyone here is talking about.

[le-weekend]

I am very much right-brained and struggle with even simple numbers and accounting concepts etc. so this is a tough call for me. For now I'm OK with having my 401K managed by my job's program (Fidelity) since I get matching funds. 

Re: self-investing, a few years ago I decided to open an ETrade account and buy a few stocks and get my feet wet. So far my returns seem to be pitiful, but maybe that's because I've only got a few hundred bucks invested. (Please don't laugh at my amounts. I am a financial novice and not anywhere close to FIRE.) 

August 2014 - October 2017: Amount spent on single stocks and trade fees:
$430.

October 2017 Net account value:
$475.

I've only made $45 over 3 years??!?

But why are you dabbling in stocks?  I made this mistake early on.  I should have opened a Vanguard account, bought a market index fund like VTI, and kept buying that market index fund.  That's the simple model that everyone here is talking about.

Yes I need to learn more about that. My mother owns stocks and enjoys it, so that was my only example. I honestly don't know anyone who knows (much less talks about) investing in anything other than their work 401K. I will check out Vanguard and market index funds.

Sent from my SM-G930T using Tapatalk

[Christof]

I've only made $45 over 3 years??!?

Yes, you only made 2000% of what you would have made in a money saving account.

At least where I live money saving accounts are less than 0.3%, often just 0.1%.