Many investors are turning to Do It Yourself Investment Management because of the benefits of self-directed investing. Allowing others to manage investor’s investment portfolios have not worked well for the individual investor causing them to consider joining the ranks of self directed investors. There are at least 5 important advantages of a Do It Yourself Investment Management Strategy.
Increase Investment Returns
The past decade has been a good example of how an active or tactical asset allocation strategy can increase investment returns versus a buy and hold strategy. A portfolio diversification strategy that avoids over valued assets can outperform the indexes and the vast majority of mutual funds with considerably less risk.
Reduce Investment Expenses
Mutual Funds and investment advisors can be very expensive. Investors typically pay from 0.75% – 2.0% (and up) in annual fees for managed funds and similar fees for an investment advisor. In addition their overall track record as a group is dismal. While these fees may not be obvious they reduce investment returns by a large amount over many years. Purchasing individual stocks & ETFs can reduce your investment expenses.
Help You Understand Your Risk
In recent years many investors did not understand how much risk their portfolios were exposed to until it was too late. If you do it yourself you will have a better understanding of your portfolio risk and asset allocation at any given time.
Avoid Following the Crowd
Most mutual funds and fund managers follow the crowd and “group learn” strategies that result in sub-par performance. With individual control of your portfolio you can avoid following the crowd.
Stay in Control of Your Own Assets / Make Adjustments Quickly
A do it yourself investment management strategy allows you to stay in control of your own assets. With con artists and Triple A institutions requiring bailouts it is wise to manage your own money. Because you are in control you are able to make adjustments quickly instead of weeks later after you receive your statement in the mail.
If you would like to self direct your investments, but would feel more comfortable with guidance, consider the premium Subscription service of the Arbor Investment Planner. The AIP does the research, asset allocation, and selecting of individual stocks and ETFs that make up the Arbor Asset Allocation Model Portfolio (AAAMP). The AAAMP subscriber is e-mailed specific details each time a change is made to the portfolio. For a low flat fee the AIP provides everything that do it yourself investors need to manage their portfolio.
If you have any comments or questions feel free to contact me at KenFaulkenberry@AAAMP.com or 281-719-8904.
| AAAMP Blog by Ken Faulkenberry | |
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Ken Faulkenberry earned an MBA from the University of Southern California (USC) Marshall School of Business with an emphasis in investments. Ken has 25 years of investment experience and is dedicated to helping people with self-directed investment management through the Arbor Investment Planner. His asset allocation strategies have an outstanding performance record. |
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