Beginner Guide to be a Do-It-Yourself Investor

Beginner Guide to be a Do-It-Yourself Investor

Being your own investment manager can be interesting and challenging at the same time if you just vaguely think about it. In order to start your Do-It-Yourself financial plan, you need to understand what steps you should do to simplify the investing plan without an advisor. Here are a few tips that we think will help you to be a DIY Investor in as simple a way as you can.

Start Now but Slow

Whether you have an investment advisor or not, it is better to start with the small amount investment that you can manage by yourself. Your financial portfolio tends to be easy and simple at this point. Even if you make a mistake on your portfolio, the loss will not be severe.

Learn What Required

It is an important to learn before do a DIY thing. You are required to know and understand the finance or investment terminology. The more you read and understand the terms, the more it makes sense to you naturally.

Next, you can learn the investment options that you think it suits you. You also need to learn the market history to prepare your investing plan. You can find many sources for these, such as books, blogs, online forum, and news.

Take Risk is a Must

Every investment has risks and this should be understood before start investing your assets. William Bernstein explains the risks into two categories: shallow risk and deep risk. The shallow risk is a temporary loss that you can recover from. It is caused by the ups and downs of the investment. Although this may cause a headache to you, it is relatively insignificant in the long run of your plan. Meanwhile, the deep risk is a permanent loss due to inflation, deflation, confiscation or destruction. Sadly, very few people actually lie awake at night worrying about these or about the risk of an inadequate saving rate which turns out it is completely under their control.

Set a Reasonable Goal

It is important to have a reasonable goal. Start with doing a math by calculating how much you need to save with your current income for investing. Remember to include the expenses that you may spend in the future. Don’t worry too much about the accuracy, you can always adjust as you go.

Choose a Simple Asset Allocation and Implement It

Choose and plan where you want to invest your money. Write it down into a plan. Implement the plan and stick with it. For example, you might be want to allocate your assets to 20% for real estate, 30% for stocks, and 50% for bonds. Be sure to write down this plan and maintain it.

Discuss with Financial Advising Team if you’d like some help to manage your financial tasks, so you can reach your goal soon. We are happy to help you.

Hopefully you found this blog article useful. Get all our FREE tax accounting and advisory news,
tips and information by subscribing to our monthly newsletter.