DIY investors risk losing out on returns
Going it alone exposes investors to their own bad habits, while taking advice in person from an expert can help to build a diversified, risk-based multi-asset portfolio.
It has never been easier to invest in stocks and shares, with many online platforms making the process simple. However, the ease of access should not blind users to the risks of going it alone and losing out on significant returns.
Research conducted by our sister company, Quilter, and the UK financial website Boring Money has found that the typical unadvised DIY investor can miss out on up to 11.3% of potential gains a year, compared with a managed portfolio.[1]
The reason for this is that DIY investors are prone to some bad investment habits. Even the most seasoned DIY investors can make mistakes and let their emotions get in the way of smart decisions. But by investing in a diversified, risk-based multi-asset portfolio, as recommended by most wealth managers, could result in more substantial returns along with lower risks.
When it comes to your future financial happiness, our advice is to take advice – in person, from a wealth manager. It will not only take the emotion out of investing but will also help you define your aims with the help of an expert and formulate a personalised plan.
Now that is a conversation well worth having.
Top five bad habits
- Holding too few shares, or being ’undiversified’
- A bias towards your home country, ignoring overseas markets
- Lack of diverse asset allocation, using only shares
- Overtrading and fiddling around the margins of a portfolio
- Panic selling, bailing out at the first sign of trouble
If you would like to talk to someone about your future financial happiness, contact us today for a free financial planning consultation and get all your financial affairs in order.
Important information
[1] Boring Money surveyed more than 7,000 UK adults and more than 200 investors in 2018.
Investments may fall as well as rise in value, and you may not get back what you put.
The views expressed in this article are those of the author and do not necessarily reflect the views of AAM Advisory Pte Ltd. This document is intended for general circulation and for information purposes only. It may not be published, circulated, reproduced or distributed in whole or part to any other person without prior consent of AAM. This document/article should not be construed as an offer, solicitation of an offer, or a recommendation to transact in any products mentioned herein. The information does not take into account the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a licensed wealth manager regarding the suitability of the investment product before making a commitment to purchase the investment product. Whilst we have taken all reasonable care to ensure that the information contained in this document is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness. Any opinion or estimate contained in this document is subject to change without notice. The above report may contain data obtained from third parties and as such we cannot guarantee the accuracy of this data. AAM advisory Pte Ltd is licensed by the Monetary Authority of Singapore, FA Licence no 100032.
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