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Investing in the stock market is one of the most profitable steps you can undertake in your journey of becoming financially secure. The stock market has constantly given over 15% returns annually to those who invested in growth stocks with high potential. However, one thing that confuses investors is the management of their portfolios.
Managing a portfolio means that you monitor your stocks regularly, perform technical and fundamental analysis, cut your stake at an ideal time, or accumulate when necessary. These factors are vital in maintaining positive portfolio growth. In a case like this, you must know when to book profits and whether to accumulate the stock again at the dip. There are two ways for maintaining your portfolio: hire a portfolio manager or do it yourself.
This blog details a method used by a majority of retail investors to manage their portfolios called DIY investing or Do It Yourself investing.
DIY or do it yourself is a common term defined for using your knowledge, experience, beliefs, skills, opinions, etc., to do something as per your predetermined goals. DIY aims to avoid any professional help, commit mistakes if they happen and learn from the mistakes to become a professional in something you are passionate about.
DIY processes suggest that people can either seek professional help or can do it themselves. However, seeking professional help will not allow them to learn how to do it, and they will always rely on professionals. On the other hand, if you learn to do it yourself, you are better equipped to make informed decisions that affect your personal life.
DIY investing or do-it-yourself investing is a process through which individual and retail investors look to expand and manage their financial portfolios themselves. Also known as self-directed investing, DIY investing allows investors to consider their own opinions and beliefs while choosing which securities to buy, when, for how long, and from where.
In DIY investing, individual and retail investors do not seek professional help from financial advisors or portfolio managers to manage their portfolios. DIY investing contributes to the transition of investors to become professional investors over time by making their own decisions and learning from their financial results. Furthermore, DIY investing is important as it puts them in charge of their finances and is answerable if there are losses.
When investors consider investing in the financial markets for the first time, they have to make numerous choices. These choices can be:
These choices can seem hard for an investor if they don’t have the time and the resources. However, they only have two, do it themselves or hire a portfolio manager. The former is relatively cheaper than the latter. Hence, investors include DIY investing in their investing journey and hope to manage their portfolios themselves. But how does that work?
DIY investing works through the following services and tools:
No stock market technique is without its pros and cons. The same is the case with DIY investing. As DIY investing for beginners is the first step towards becoming a professional investor, it can result in numerous financial mistakes if not done carefully. However, as investors are their bosses, DIY investing can benefit them through many factors.
Here are the pros and cons of DIY investing:
DIY investing is simple and cost-effective but not necessarily always successful. Before going forward with DIY investing for beginners, you must do extensive research on what you must know before investing and what services and tools you would require for successfully executing DIY investing. If you are looking for the best DIY investing platform, you can end your search at IIFL. It is one of the most affordable discount brokers that allows you to open a Demat and trading account for free. All you have to do is visit the IIFL website or download the IIFL Markets app from the app store.
Yes, DIY investing is followed by a majority of individual and retail investors and can prove to be a cost-effective method for managing your portfolio. However, it is advisable that you garner financial knowledge and only invest after doing extensive due diligence.
Yes, DIY investing allows you to invest by yourself. However, you will need a Demat and trading account before you start investing.
DIY investments tools are products and services that you can use to make informed investment decisions and manage your portfolio effectively.
Invest wise with Expert advice
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