Imagine a close friend asks you if they should attempt to manage their own portfolio or hire someone to help them. Share the pros and cons of both as well as at least one resource (book, article, video, etc.) not yet shared by one of your classmates that can help them decide.
Pros- Managing your own investment portfolio can come with a lot of personal satisfaction. If you are a sophisticated investor you can enjoy the advantages of not having to deal with third party fees such as brokers, financial advisors or any other financial service organizations. Some of these fees can range anywhere from 0.15% to 0.7% annually, it may not sound like it is much but if you are investing on a large scale with big volume this is a lot of money to just give away. According to an article I read alleged that, âMorningstar admitted that low cost was a bigger indicator of superior performance than their own mutual fund star ratingâ (Carter, 2014). This is definitely an eye opener, to show that a good chunk of what your portfolio earned went to fees and commission. So if you have the ability to take your investment in your own hands and manage it yourself, I would advise to go for it.
Cons- There is a lot to know when it comes to dealing with the complexity in the financial arena. Itâs like someone telling you to operate a heart surgery procedure on yourself. Yikes!! I hope not, especially if you didnât go through the proper schooling and training. However does that means it is impossible, of course not it can be done (managing your portfolio that is). The financial world has a different lingo, culture, knowledge of terms. You can easily loose if you are not prepare or willing to dedicate yourself to learn the basic and then more.
I would recommend someone who is new to investing and the financial world in general to read Mind over Money: Overcoming the money Disorders the Threaten Our Financial Health by Drs. Brad and Ted Klontz. This book can server as a beginnerâs insider to learning and understanding basic of over coming bad money behavior.
Carter, E. (2014)Should You Pay Someone To Manage Your 401k? Retrieved fromhttp://www.forbes.com/sites/financialfinesse/2014/05/16/should-you-pay-someone-to-manage-your-401k/#7d92ba2f65921990d4546592
COMMENT
Imagine a close friend asks you if they should attempt to manage their own portfolio or hire someone to help them. Share the pros and cons of both as well as at least one resource (book, article, video, etc.) not yet shared by one of your classmates that can help them decide.
Pros- Managing your own investment portfolio can come with a lot of personal satisfaction. If you are a sophisticated investor you can enjoy the advantages of not having to deal with third party fees such as brokers, financial advisors or any other financial service organizations. Some of these fees can range anywhere from 0.15% to 0.7% annually, it may not sound like it is much but if you are investing on a large scale with big volume this is a lot of money to just give away. According to an article I read alleged that, âMorningstar admitted that low cost was a bigger indicator of superior performance than their own mutual fund star ratingâ (Carter, 2014). This is definitely an eye opener, to show that a good chunk of what your portfolio earned went to fees and commission. So if you have the ability to take your investment in your own hands and manage it yourself, I would advise to go for it.
Cons- There is a lot to know when it comes to dealing with the complexity in the financial arena. Itâs like someone telling you to operate a heart surgery procedure on yourself. Yikes!! I hope not, especially if you didnât go through the proper schooling and training. However does that means it is impossible, of course not it can be done (managing your portfolio that is). The financial world has a different lingo, culture, knowledge of terms. You can easily loose if you are not prepare or willing to dedicate yourself to learn the basic and then more.
I would recommend someone who is new to investing and the financial world in general to read Mind over Money: Overcoming the money Disorders the Threaten Our Financial Health by Drs. Brad and Ted Klontz. This book can server as a beginnerâs insider to learning and understanding basic of over coming bad money behavior.
Carter, E. (2014)Should You Pay Someone To Manage Your 401k? Retrieved fromhttp://www.forbes.com/sites/financialfinesse/2014/05/16/should-you-pay-someone-to-manage-your-401k/#7d92ba2f65921990d4546592
COMMENT
