Taking Charge of Your Financial Future

March 15, 2016

Most people invest in order to reach long-term goals, like retirement. But what’s the best way to invest? Should you manage your own portfolio of funds, or have it managed for you?

This is a question that we’re often asked, given that we have different ways for investors to use our Upgrading strategy.

We publish the NoLoad FundX newsletter, which helps investors use Upgrading to buy and sell funds in their own accounts. That’s the DIY option.

For investors who don’t wish to do it themselves, we buy and sell funds for private clients in their accounts, and we manage portfolios of funds for shareholders.

There’s no ‘right’ answer to this question. It’s ultimately a personal decision –what works for you may not work for other investors. But it’s worth taking some time to consider which one might work best for you.

Find What Works for You

Some investors focus solely on performance, asking, “Will I have better returns if I manage my own portfolio or if you do it for me?” While performance is certainly important, it shouldn’t be the only consideration.

You’ll want to consider whether you enjoy investing and how much time and interest you have to devote to it. After all, investing is a long-term commitment. If you hope to retire in 30 years, then you’re looking at managing your portfolio for decades, through up and down markets and through your personal ups and downs, like career changes, marriage, or parenthood.

Many people have no problem finding time to manage their portfolios. They enjoy investing, and they like monitoring their portfolios and deciding what trades to make. It allows them to have complete control of what they own at any time. As one investor told us, “It’s fun!”

But others find that they want to spend their golden years taking extended vacations and spending quality time with their families without having to worry about what’s happening in the market.

Another consideration is your temperament. As famed investor Warren Buffet explained, “The most important quality for an investor is temperament, not intellect.”

Over long-term periods, like 20 years, stocks have had good gains, but in order for investors to participate in those gains, they had to stay disciplined through some very difficult market conditions. They had to stay focused on their long-term goals in the face of short-term volatility. This can be challenging, and it’s one reason why some people opt to have their portfolio professionally managed rather than trying to go it alone.

Don’t Let the Decision Hold You Back

Deciding how to manage your portfolio is an important step toward taking control of your financial future, and it makes sense to think about what might work best for you. But you don’t want to spend years out of the market while you’re trying to decide whether to manage your portfolio or have a professional do it for you.

If you feel stuck, remember that you can change your mind. We have clients who started out with NoLoad FundX newsletter and then eventually decided that they preferred to have us manage their fund portfolio for them. Some enjoyed managing their money, but they turned to us to make sure they’d have a back-up plan in place if anything happened to them.

The decision also isn’t all or nothing. We’ve talked to investors who have chosen to manage part of their account on their own, and then they’ve invested the rest in one of the funds that we manage. You might enjoy choosing stock funds, for instance, but you don’t have the time or interest to manage a separate bond fund portfolio.

Like all investment decisions, it makes sense to reassess your decision every so often, and see if your needs or interests have changed.

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