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Managing Your Own Investment Portfolio – Learn To Take The Wheel

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Introduction

 

 

Here’s an example of how many investors first experience the market. An investor seeks out the help of a professional money manager. They give their hard-earned money to investment professionals whose expertise they trust.

The investor pays the financial professionals a fee, and in return, expect good results. However, their results aren’t what they expected.

 

 

When they see these less than stellar returns, they feel unsatisfied – and as a result, they decide that it may be time they started to manage their own investments.

Taking control of your financial future can be a good idea, but what does it really entail?

Well, in this lesson, we’ll help you determine if managing your own investment portfolio is a good choice for you. But keep in mind that managing your own funds isn’t an all-or-nothing enterprise.

 

But before we begin, we would like you to read and agree to the Terms & Conditions of this post before you proceed any further.

Disclaimer: Invest In Wall Street is in no way financially or legally responsible for any investing decisions made by any of our readers and are, in turn, acting on their own free will. The information in this article is purely educational and should not be abused or misconstrued in any way, shape, or form.

 

Realistic Expectations For Taking Control Of Your Investments

 

 

Many individuals choose to self-manage one portion of their investments and trust professionals to manage the rest. Your goal should be to find the investment strategy that suits you.

These are three things to consider when determining your level of involvement in managing your investments: time, effort, and ability. Let’s start with time.

 

Time Reveals All……

 

 

Investing takes time. However, your approach or strategy will determine how much of your time it will take.

Basic investing usually begins with asset allocation. This is where you invest your money across stocks, bonds, and possibly other asset types. Then you further diversify those funds into different categories within each asset class.

Asset allocation with mutual funds and ETFs usually take less time commitment.

However, asset allocation with individual stocks and bonds typically requires more time as you have more trades to manage. More advanced trading typically involves more buying and selling of stocks, which requires more time as well.

 

 

If you wish to trade short term investments like options, futures, or forex, you will need to have a more active hand in your investments each day.

Now that you know how much time you need to dedicate to your trading, lets move on to effort.

 

Effort. You Get Out What You Put In

 

 

 

If your only investment strategy is asset allocation, not a lot of effort is required other than the initial setup of the portfolio.

Purchasing individual stocks requires more effort because you’ll have to dedicate additional time analyzing and finding quality stocks. This could require you to forecast changes in the economy and to look into a company’s financial statements and analysts’ expectations.

Some investors live for this type of analysis and welcome the challenge, whereas other investors find it too difficult or time-consuming.

Analyzing charts, also known as technical analysis, is another consideration.

Ability Is The Skill That Takes….TIME….To Develop

 

Beyond time and effort, the ability to create a well-allocated diversified portfolio takes know how, such as knowing how to find a good stock, analyzing a chart, or invest in the more challenging asset classes.

How and what you invest in will depend largely on your knowledge – as increasing your investment knowledge will take more time. The degree of knowledge investors hope to acquire varies as well.

For instance, not everyone wants to manage their own investments. Some investors just want to know enough to be able to communicate more effectively with their broker.

Others are happy to have a broker manage the majority of their investments, but also like to manage a portion themselves.

The more of your portfolio you decide to take on, the more time and effort you must be willing to put in. This may also mean that you’ll need to increase your ability to analyze and trade.

 

Quick Recap

In Review…..

Managing Your Own Investment Portfolio

 

  • Many individuals choose to self-manage one portion of their investments and trust professionals to manage the rest. Your goal should be to find the investment strategy that suits you

 

There are three things to consider when determining your level of involvement in managing your investments…….

 

  1. Time
  • Investing takes time. However, your approach or strategy will determine how much of your time it will take
  • Asset allocation with mutual funds and ETFs usually take less time commitment
  • However, asset allocation with individual stocks and bonds typically requires more time as you have more trades to manage
  • More advanced trading typically involves more buying and selling of stocks, which requires more time as well
  • If you wish to trade short term investments like options, futures, or forex, you will need to have a more active hand in your investments each day

2. Effort

  • If your only investment strategy is asset allocation, not a lot of effort is required other than the initial setup of the portfolio
  • Purchasing individual stocks requires more effort because you’ll have to dedicate additional time analyzing and finding quality stocks. This could require you to forecast changes in the economy and to look into a company’s financial statements and analysts’ expectations
  • Some investors live for this type of analysis and welcome the challenge, whereas other investors find it too difficult or time-consuming

3. Ability

  • Beyond time and effort, the ability to create a well-allocated diversified portfolio takes know how, such as knowing how to find a good stock, analyzing a chart, or invest in the more challenging asset classes
  • How and what you invest in will depend largely on your knowledge as increasing your investment knowledge will take more time. The degree of knowledge investors hope to acquire varies also
  • For instance, not everyone wants to manage their own investments. Some investors just want to know enough to be able to communicate more effectively with their broker
  • Others are happy to have a broker manage the majority of their investments, but also like to manage a portion themselves
  • The more of your portfolio you decide to take on, the more time and effort you must be willing to put in. This may also mean that you’ll need to increase your ability to analyze and trade

 

 

These are the investing aspects that you need to evaluate if you actually want to take investing seriously. Some investors choose a more hands-on approach, where they consistently research assets that best suit their portfolio. This can take place on a weekly, monthly, or even quarterly basis through regular monitoring and simple adjustments.

Some investors choose to even do this on a daily basis – these are known as day-traders, who choose to invest in assets such as futures, option, and forex; to reap consistent, quick, and daily profits every day. However, and I don’t say this lightly, day-trading has a considerable amount of risk, as this may not be suitable for all investors. Day trading takes YEARS – in terms of knowledge and expertise – as only the most advanced and sophisticated investors should attempt to do this.

If you find investing to be too time-consuming or are confused on where to look, then perhaps a professional money manager is best fit to manage most of your portfolio – just make sure to pay attention to the services and fees involved before making any commitments.

Remember, you do not have to go through this process alone. If you really need help, then seek out advice from those with a better understanding of the stock market. You could also start immersing yourself in the various investment options the stock market has to offer in the mean time, so you can eventually get to a point where you know exactly what kind of investments better fit your needs…and trust me when I say this, it will be extremely rewarding and fulfilling when you have finally mastered the ways of the stock market, and begin the process of managing YOUR OWN PORTFOLIO.

Put yourself in the driver’s seat and expand your horizons of investing know how here at Invest In Wall Street.

I hope you have enjoyed this post and found the information to be quite useful. If you have any questions or concerns, please feel free to leave them down in the comment thread below and make sure to like and share this post.

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