DIY investing: what is it, and is it right for me? 

1 min readLast updated February 1, 2024by Rachel Carey

This article will take you through everything you need to know about DIY investing and if it’s right for you.

Summary 

  • Do-it-yourself (DIY) investing is an investment strategy where you build and manage your investment portfolio on your own. 

  • Although it’s been around for a number of decades, DIY investing has grown in popularity in recent years, mostly spurred on by the pandemic.  

  • Without expert guidance, DIY investors could be putting their hard-earned money in jeopardy. 

  • Unbiased can connect you with an expert financial advisor who can help you achieve your investment goals.  

What is DIY investing? 

Do-it-yourself (DIY) investing is an investment strategy where you build and manage your investment portfolio completely on your own.  

You make all your investment decisions, including which products to choose, and make purchases through an online trading platform.  

Most DIY investors choose to use a full service brokerage platform to build their portfolio. Here, investors must pay a commission on transactions.  

Others may opt to use automated services, such as robo-advisors, to help them manage their portfolio.  

What are the pros and cons of DIY investing? 

If you’re thinking about DIY investing, here are some pros and cons you need to know: 

Pros 

  • Lower fees – Investors can save on fees if they choose to go down the DIY route. You do not have to pay an advisor, and platforms usually only require you to pay for the services you need.  

  • Potentially higher returns – Lower fees can result in higher returns as you get to keep more of your money. This can be used to reinvest in your portfolio or put into a savings account.  

Cons 

  • Isolated decision-making – Making decisions in isolation means you have no one to turn to for advice or guidance. If you face a tough question or you’re not sure what to do, you have no expert on hand to help.   

  • Steep learning curve – A financial advisor has spent years navigating the market, so they know it like the back of their hand. Unless you have a financial qualification or a background in investing, you face a steep learning curve to get up to speed.   

  • Time-consuming – Investing takes a lot of discipline and dedication to get right. This means you must spend time on it. If you have a full-time job and other priorities, you might struggle to put in the work you need to get the returns you want.  

  • Missing out on other financial advice – As well as building investment portfolios, financial advisors also offer financial advice for other areas of your life, such as estate planning, retirement planning, and tax. By choosing to forgo a financial advisor, you are also missing out on expert advice in other areas.  

Is DIY investing popular? 

Although around for a number of decades, DIY investing has grown in popularity in recent years.  

The most recent uptick in popularity was, in many ways, spurred on by the pandemic. 

During this time, market fluctuations led to opportunities for big gains, and many would-be investors didn’t want to miss out. 

“Lockdown boredom” was also a big factor, with many experts stating that more people gravitated towards DIY investing due to having more time on their hands.  

While DIY investing might be popular, making big financial decisions in isolation could lead to costly mistakes. Without expert guidance, DIY investors could be putting their hard-earned money in jeopardy.  

Is DIY investing right for me?  

When it comes to managing your money, it pays to trust the experts.  

Here are seven key reasons why getting expert financial advice is better than going solo.  

1. Your risk balance isn’t right  

Aligning your risk appetite with your financial goals and investment timeline is a delicate balancing act.   

For example, if you’re approaching retirement, high-risk investments can eat into your savings if they go wrong, but if you have a few years left before you leave the working world, you can afford to take more risk.  

A financial advisor can strike the right balance. They will look at your circumstances and future goals and recommend investments based on your circumstances and risk attitude.   

2. Your tax bill is too high  

There are ways to reduce your tax burden through your investments if you know where to look.  

Taking advantage of tax deductions and allowances can save you money, so it’s important to understand how to reduce your tax bill legally.  

A financial advisor knows these intricacies and what to look out for to steer you in the right direction.  

3. Your eggs are all in one basket  

Diversification is key to successful investing.  

If all your money is in one sector and that suddenly drops in value, you could face huge losses.   

A financial expert can help protect your money and prevent your investments from falling victim to market fluctuations by ensuring they’re well diversified.   

4. You don’t have a strategy  

A strategy and a well-defined financial plan help you avoid snap or rash decisions such as panic selling or jumping on the latest investment fad.  

By working with a financial advisor, you’ll get impartial guidance about investment risks and direction on the best course of action for your money.    

5. You never review your portfolio  

With investing, it pays to have a long-term view and knowing when to rebalance your portfolio.  

A financial advisor can offer guidance on when you should review and rebalance your portfolio to help boost your returns.   

6. You’re trying to time the market  

Investing is all about time in the market rather than timing the market.  

You want to be confident in any companies, sectors or assets you invest in, understand how they work, what tailwinds will drive growth, as well as any challenges. 

A financial advisor can help you gather all this information and make the best decision for you. At Unbiased, we do the hard work for you and find a financial advisor perfectly suited to meet your needs.   

7. You don’t understand your investment options  

Investment options aren’t one size fits all.  

Some are higher-risk assets offering potentially higher returns. Others will focus on income via dividends. Either can be useful depending on where you are in your life.   

An advisor understands the various options and will guide you to the best investment options for your needs, saving you a lot of time and headaches around which one is the right choice.  

Get expert financial advice 

Building an investment portfolio and growing your money is no easy task. It takes time, dedication, discipline, smart decision-making and a deep understanding of the markets.  

If you need help building your portfolio, it's important to seek expert advice.  

A good place to start is Unbiased. 

Here, you can get matched with an independent SEC-regulated financial advisor who can ensure you’re getting the most out of your current plan and are on course to achieving your investment goals.   

Match with an expert today.

Senior Content Writer

Rachel Carey

Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.