TIME COMMITMENT:

Self-investing requires a significant time commitment to research, analyse and monitor investments. Consider the following:

• Research and Education: Are you willing to dedicate time to learn about different investment vehicles, market trends, and financial strategies?
• Monitoring and Management: Can you commit to regularly monitoring your portfolio, rebalancing as needed and staying informed about economic developments that may impact your investments?
• Long-Term Perspective: Successful investing often requires patience and a long-term perspective. Are you prepared to weather market volatility and resist the urge to make impulsive decisions based on short-term fluctuations?

INCLINATION AND INTEREST:

Beyond time commitment, self-investing requires a genuine interest in financial markets and investing. Ask yourself:

• Passion for Learning: Do you enjoy learning about investments, analysing financial statements, and understanding economic indicators?
• Risk Tolerance: Are you comfortable making decisions that could potentially result in financial gains or losses? How do you handle risk and uncertainty?
• Emotional Discipline: Can you maintain emotional discipline during market downturns or periods of underperformance, avoiding emotional decisions that may undermine long-term goals?

SKILLS AND KNOWLEDGE:

Successful self-investing requires a solid foundation of financial literacy and analytical skills:

• Financial Literacy: Do you understand basic financial concepts such as asset allocation, diversification, risk management and tax implications of investments?
• Analytical Skills: Can you evaluate investment opportunities, assess the financial health of companies and interpret market data to make informed decisions?
• Technical Know-How: Are you comfortable using investment platforms, analysing charts and executing trades effectively?

CONSIDERATIONS AND ALTERNATIVES:

• Professional Advice: If you lack time, inclination or expertise, consider consulting with a financial advisor who can provide personalised guidance and manage investments on your behalf.
• Hybrid Approach: Some investors opt for a hybrid approach, where they manage a portion of their investments independently while relying on professionals for specialised advice or complex strategies.
• Investment Goals: Align your decision with your investment goals, risk tolerance and financial objectives. Assess whether self-investing aligns with your long-term financial plan.

CONCLUSION:

Self-investing can be rewarding for those who are willing to invest time in research, have a genuine interest in financial markets and possess the necessary skills and knowledge. However, it’s essential to realistically assess whether you have the time, inclination and expertise to manage investments effectively. If not, seeking professional advice or exploring alternative investment approaches may be more suitable. Ultimately, the decision to self-invest should be informed by a careful evaluation of your personal circumstances, financial goal, and comfort level with managing investments independently in a dynamic and evolving market environment. You know it makes sense.*

*RISK WARNING

The value of investments can fall as well as rise. You may not get back what you invest. The information contained within this blog is for guidance only and does not constitute advice which should be sought before taking any action or inaction. All information is based on our current understanding of taxation, legislation, regulations and case law in the current tax year. Any levels and bases of relief from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. The Financial Conduct Authority does not regulate tax planning, estate planning, or trusts. This blog is based on my own observations and opinions.