You might be thinking about taking the reins of your investment portfolio. To help you with your decision, RBC Direct Investing has identified four qualities that DIY investors share. How many do you have?
1. You like the idea of financial control. No one cares about your financial success more than you do. By doing it yourself, you’re in control of your money and you might save on fees, which means there’s potential for larger returns on your investments.
2. You can handle ups and downs. You’re likely aware of the technical aspects of investing – choosing investment products and strategies, and reading annual reports and financial statements – but emotions can also impact investment outcomes. How would you respond to a big market uptick or downturn, or to a hot stock tip from a friend?
As a DIY investor, you’ll be navigating these situations without input from a professional advisor. If you’re unsure of your emotional and behavioural tendencies, treat yourself as a test subject. Start a risk-free practice account or open a small investing account so you can observe your reactions to market and business cycles. Understanding your tolerance for volatility can help you avoid common investing mistakes.
3. You’re a lifelong learner. Are you naturally curious? Do you enjoy reading and doing research? As a DIY investor, you’ll need to stay on top of market and business news. Lifelong learning is key to successful investing. Self-directed investors with a personal interest in a particular sector or cause, for example, often like to explore how this could fit with their investment goals.
4. You have a plan. Most people wouldn’t go on a road trip without a map, yet self-directed investors sometimes jump in without a plan to guide their decisions. Your financial goals, budget, life stage and tolerance for risk are just some of the factors to consider. Don’t skip this step – having an investment plan will also help you stay the course during any market turbulence.
Find more investing inspiration at rbcdirectinvesting.com.
Source – www.newscanada.com