Even people that you may think would manage their own investment portfolios don’t

Mar 30

Even people that you may think would manage their own investment portfolios don't.  In his post Portfolio Management & Decision Fatigue, Ben Carlson noted that even the great economist and Yale professor Gary Shilling does little in the way of managing his investment portfolio. Carlson touches on two very important point that I remind people often when discussing whether or not they should work with an investment advisor.

  • Controlling your emotions in the investment process requires a lot of experience and an understanding of financial market history. Most people either don’t care about these things or don’t have the time required.
  • At times, life can be busy and stressful for everyone. It’s nearly impossible to keep those stresses out of the decision-making process. They say stress arises from the discrepancy between where you are and where you’d like to be. Determining how much time and effort you’re willing and able to put into the portfolio management process is one way to help in narrow that gap.
The decision of who manages your assets whether it is yourself or a professional advisor is one of the biggest financial decisions that you will likely make within your life.  For those who want to take on this extremely important challenge, I encourage people to educate themselves on some of the basic principles and fundamentals of investing and to realize some of the shortfalls of do it yourself asset management.  I certainly don't discourage anyone from tying it on their own but only to realize the stakes that are involved.  

An individual on their own can have just as much success as a professional advisor with the right blend of discipline, focus, and responsibility.  It is just a matter of asking if they want to bare those additional burdens?

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