Thinking about Do It Yourself (DIY) investing? Consider your financial knowledge, investment strategy, risk tolerance and goals, and ability to identify fraudulent opportunities before deciding if DIY investing is the right fit for your investment needs.
Do It Yourself (DIY) Investing, also called self-managed or self-directed investing, is when an investor creates and manages their own investment portfolio. A DIY investor will often use digital platforms, phone applications, and discount brokerages to build their portfolio, instead of relying on a full-service registered advisor.
Managing your own portfolio can offer more control and lower fees than a traditional investment approach, but you are also completely responsible for all of your investment decisions, successes, and losses.
Don’t follow the pack. DIY investing is not for everyone. It requires planning, research, and time. Traditional investing with an advisor may be a better fit depending on your time availability and knowledge level.
Guesswork is a risky investment strategy. Lack of understanding of what investment products you are buying and selling is one the biggest contributors to losing your investment. Thoroughly research any investment product before purchasing and make sure you know exactly what you are putting into your investment portfolio.
Can you handle the emotional rollercoaster? If you need the money you invested in the short term, buying shares that can rapidly rise or fall may not be the best fit for you. Market volatility can be stressful.
Plan: You should make an investment plan that fits your needs and matches your risk level. You will need to regularly review and update it. Your DIY investment portfolio should be based on defined short to long-term goals and customized to fit your financial and personal circumstances. You will need to research and assess each investment before you buy.
Pick your investment information sources carefully and research all potential investments. Be wary of investment advice from celebrities or social media. Influencers and celebrities may only have a layman’s knowledge, they may make recommendations that support their own interests, or they may be paid to promote an investment to their audience. Scammers also frequently post on social media, so beware.
Assess your risk and don’t invest more than you can afford to lose. Any money you invest can be lost during the market upheaval. If you need to withdraw shares for an urgent personal expense, you may lose money selling shares at a loss.
Reduced retirement income: Investing for retirement can be a complicated process, and large losses can reduce the amount you have saved when you retire.
Fraudsters create fake websites and use advertisements, recommendations, and private messages to convince investors that they should part with their money to achieve big returns. Visit our investment fraud web page for more information about how to spot and report investment scams.
If you have discovered a fraudulent investment opportunity, you can report the scam to the FCAA Securities Division at firstname.lastname@example.org or 306-787-5936.