| Investing your money on your own instead of paying a professional to do it sounds like a good move for some people. There are plenty of books and seminars out there that can teach you how to do that, and various Web sites have made it easy for anyone interested to play broker. Some people have been very successful at it and even made millions.
Should you do it?
“Some people are able to do it successfully. The key is having the time, interest and temperament,” said Connie Rose, financial adviser with Edward Jones in Gig Harbor. “It takes a serious commitment. I don’t think it’s something you can just play at and be successful over the long haul.”
People who think they have what it takes should consider their personalities, and whether they can tolerate high risk. “Certain personalities should do it on their own — people who like to trade, have a lot of time and like to be in and out every day,” said Pete Crane, financial adviser with Smith Barney in Silverdale. “They’re out there, and some are very successful.”
Financial experts see fewer people willing to take that step after the “dot-com bust” in the early 2000s. “People realized it isn’t as easy as they thought,” Crane said.
One of the reasons why people fail at being their own investors is emotional. Human beings are often motivated by greed, fear and instant gratification. Fear could be good to an extent because it may keep someone from making a mistake, but on the other hand, investing should not be based on emotions. Financial planners say that is one of the advantages of working with a professional, who will take the emotions out of the equation.
Solo investors usually make the mistake of not looking at their stocks as a long-term investment and instead ride the market. “In my opinion, people who are speculators should be those with money to burn,” Rose said.
Those who want to venture on their own have all sorts of resources including books and subscription-based Websites (like www.investools.com from Success Magazine that includes an “investment course” and a variety of tools to keep solo investors on the edge). One of the best-known figures in the solo investing world is Phil Town, who argues that individual investors who play it smart can do a much better job than mutual funds managers, and even recommends people invest on their own instead of opting for an employer-sponsored plan like 401k. Town, who wrote a book on the subject, has made millions using his strategies and claims all it takes is 15 minutes a week by using the Success Magazine’s online tools.
Should you do it? You’re the only one who can decide which road has more risk, or more success, for you. | 