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Personal Perspective: Some Tough Advice for the Do-It-Yourself Investor

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Back in the good old days, it was considered a rite of passage to work on your own car. Father and son would pop the hood and pull spark plugs, change the oil and do other “manly” work.

Things are different now, and people don’t do the regular maintenance on their cars anymore. Why? Because in order to do it properly, you would need to have at least two different computers in your garage. Today’s fathers and sons have found other activities to bond over, like playing video games.

For most of us, doing our own car maintenance is just a poor use of our time, and taking the car to the dealership, or another automotive expert, is a good value for our money. You can still do it on your own, of course, but it just doesn’t make sense.

Some individual investors “work” on their own portfolios. As do-it-yourself investors, they try to make sense of the nuances of the global economy in their limited free time (usually after work, after dinner and after watching “Hawaii 5-0” reruns on television). They wonder about how they should invest in natural disasters in Japan, radioactive clouds over Tokyo, Arab springs and falls, U.S. debt downgrades, political gridlocks, quantitative easings and the implosion of the European Union, and get most of their investment news from Jim Cramer on CNBC.

What they should know is that, as with car engines, times have changed in the investment environment. The world and the financial markets have become too complicated. They probably shouldn’t mess around with their own portfolio on a part-time basis unless they are prepared to lose it.

You can still manage your money on your own but, like working on your own car, it just isn’t worth it anymore. There are other things to do with your time. Play with the kids, take your wife out on a date, play some golf. If you find the right investment adviser for you, then you’ll find the money you pay for that advice to be well spent and a good value.

Trying to safely navigate today’s financial markets is tough enough for full-time professionals. You might get lucky and make a few good calls, but if you have enough capital for it to matter, don’t take the chance.

Ken Solow is a founding partner at Pinnacle Advisory Group, a Columbia-based wealth management firm. He can be reached at KSolow@PinnacleAdvisory.com.