Better returns DIY investing

Better returns DIY investing

Are you comfortable investing your own money? For the longest time, I’ve taken the investing responsibilities of my own accounts. This means I make decisions to which funds or stocks to invest in, and to buy or sell. Is this risky? Absolutely! It is nerve racking to watch your investments go up and down. Ultimate question…am I doing as good as if someone else was managing it for me? Will I get better returns from DIY investing?

First of all, why would I even mess with investing when I can allow someone else manage my money for me? For me, I think it was the excitement. The excitement to see growth in the trades I made. I started getting into investing during the dot com boom. It was easy to open a brokerage account, deposit some money, and start buying. All the tech companies were on fire so the growth was exciting to see each day. To me, the excitement revolves around whether I picked the right one or not…kind of like roulette where you can pick black or red. When you hit, you get a jolt of excitement. Yes, I did compare investing to gambling. That’s what I feel when I pick the right one.

How do I know which is the right one? I don’t. You have to do your research and make sound investment decisions. The more you learn and the more you experience, the more financial confidence you will have. I’ve had my share of stock picks that were great, good, stale, and not so great. But I made my investment decisions based on the information I had and what I thought the industry was going to look like in the future.

Investing for the long term is my method. Trying to day trade is not something I am comfortable with. Not just because it was nerve racking to see your investments go up and down a roller coaster, but every buy and sell transaction you have to keep track of when you file your taxes to determine if you had a capital gain or capital loss. During my first year of investing, I probably made about 50 transactions not knowing I needed to keep track especially when I sold. Let’s just say I had a horrible time filing my taxes that year. Long term investing for me is how I grew my portfolio. Research and invest in what you believe is going to be the one. Be sure to monitor and watch it grow.

How do I handle the gains and losses, especially the losses? No question about the gains…it’s excitement at this point. The losses are the tough ones to swallow. If you realize that it’s not worth keeping long term, sell and recoup what you have remaining. If it’s worth keeping, like I said…long term investing.

I realized during the Covid pandemic that tech was going to be big so I sold a number of my stocks and invested in Apple. It turned out to be the right one. In 2021, I said I would focus on the electric vehicle industry especially with Tesla. I’m at a loss right now but because I believe the EV industry will be a huge sector in the future, I plan to hold my investment in Tesla. You can see my portfolio gains and losses. Like I said earlier, some picks were great, good, stale, and not so great.

I think I’ve done okay doing my own investing especially without having a financial background. But could I have done better if I didn’t manage it myself? I don’t know the answer to that question but the closest data point I have to answer that question is to compare the returns between my brokerage accounts and my TSP (aka 401K) account. I recently noticed that my returns on my brokerage accounts were exceeding the returns in my TSP. Yes, I did choose what funds to invest in my TSP but to actually see my brokerage accounts that I buy individual stocks with exceed the returns from a managed portfolio, I’m pretty excited to think that my DIY investing is on par. The stock market is volatile and this can all change tomorrow though.

Whether you do your own investing or have someone manage your investments, you need to have the financial knowledge regardless. For 20+ years, I’ve always wondered whether or not I should have had someone manage it for me, tell me what’s going on, where I should focus my investments in, and be satisfied with some growth. Now after looking at years of investing and being able to do a comparison, I can say that today I have better returns DIY investing. If you are interested in following my journey, email subscribe to get alerts of latest posts or follow me on FacebookInstagram, and Pinterest.

To see all my previous articles, go to my Archive page

Leave a Reply

Your email address will not be published. Required fields are marked *