5 Pros and Cons to Building Your Own Investment Portfolio

In this post we discuss 5 Pros and Cons to Building Your Own Investment Portfolio.

Most people don’t know that they even have an investment portfolio, unless they have a financial advisor.

If people do have investments, they are usually in a 401K that has an automated target date portfolio that you chose.

I wanted to build an investment portfolio to save for my son Jordan’s college education.

When I told advisors that what I wanted to do, most wouldn’t help me because I didn’t have at least $500,000 to invest.

I ended up building him an All Seasons Portfolio on my own.

I am very happy I did, as he has gained money since I started in October of 2019, which is extraordinary since most people are down 20% with the stock market collapse.

In this post, we discuss the pros and cons of building your own investment portfolio.

Use this information to discover if you are making the right decisions about your investments.

PRO and CON #1 You Learn About Investing

The Pro to building your own portfolio is that you will learn about investing.

You’ll learn about index funds, and how to purchase shares of funds and how to balance them.

The Con is that you have to spend time to learn these skills.

PRO and CON #2 You Become Responsible for Your Investments

This is a PRO if you are a self empowered person, and you believe that you create your own destiny.

Then what is better than taking charge of your investments too?

You become responsible, and you can use this to make more conservative and well thought out decisions in regards to your money.

The Con is that if you make a mistake, it’s on you.

There is no one to blame, or take responsibility but yourself.

In addition, you need to have self control, to follow your portfolio.

Some people enjoy having someone else handle their money because if they handled it, they would spend it all instead of sticking to an investment plan.

PRO and CON #3 You Save Money in Fees, and Grow Your Money Faster

In my blog post Financial Kindergarten to 4th Grade – Find Out Your Grade I show how you can literally grow $24,000 to $44,463.42 if you invested in the stock market at an annual return of 6%, and left the money there to reinvest and compound.

If you used an advisor, who did the same strategy, and you paid them 1%, then you would only get 5% return, and would grow $24,000 to only $39,944.47.

That’s a difference of almost $5,000.

If the advisor charges more than 1%, you lose even more!

So a big PRO is that you will get a higher investment return.

The Con is that if you do a more complicated portfolio like the All Seasons, it does require effort and time on your part to do it yourself.

It might be more cost effective to pay the fee, if it is reasonable, to an advisor and have them do the work of investing and rebalancing for you.

PRO and CON #4 You Can Keep Track of Your Investments

The PRO of doing your own investments is that you can track your investments and evaluate how they are doing.

What you keep track of expands.

If something is amiss, or you have extra money to invest, you can handle it immediately if you want and you don’t have to worry about someone else having to do it for you.

The Con is that if you are paying to close attention to your investments, you might be putting too much time into them, and being less effective for the time spent.

PRO and CON #5 You Can Choose Your Own Portfolio

The 5th PRO and the reason I do my own portfolio is that I got to choose the All Seasons Portfolio.

This was a portfolio with low volatility and high growth (9.72% in Tony Robbins book Money Master the Game).

It was recommended by Ray Dalio, a financial genius who knows a lot more about investing than I do.

I wanted to use this one, and the advisors I talked to wouldn’t help me or were prohibitively expensive.

The Con is that if you don’t know what portfolio to choose, you might appreciate the advice of your fiduciary advisor.

They tend to keep track of trends and may have good advice as times change.

Conclusion

I got great value for my son Jordan and my family by building our own investment portfolio.

I have the time, interest and skills to do it.

If you want to save fees, and learn how to build your own portfolio, then I suggest you CLICK HERE and learn more about our DIY Build and Balance Your Investment Portfolio program.

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