Just because you can do something yourself, it doesn’t mean you should. There are an awful lot of things I could do – jumping out of a plane, abseiling down a cliff, putting up wallpaper – but it’s likely that none of these would end well (not to mention the fact I don’t want to do any of these things).
In recent years, DIY investing has become cheaper, easier and more accessible than it has ever been before. But with that it has become normalised, creating a fallacy that everyone should be looking after their own investment portfolios and handling the complexities of asset allocation without any help. And this creates the very real danger that many people will try to get by because they think they should and because they fear seeking help will be too expensive.
There’s a fine line to tread here. I am definitely in favour of people becoming more engaged with investing and taking control of their finances. And I am definitely against people being overcharged for mediocre products and services that will seriously impact their wealth. But there is a time and a place for DIY, and there are times it pays to call in the experts.
This week we looked at when to DIY your investments, and when not to, and what is immediately obvious is there is no one-size-fits-all approach. How involved you should be in your investment portfolio depends on how much time you have to dedicate to it, and how interested you are – it’s no failing not to find compound interest and standard deviation fascinating.
I think for most of us a pick 'n' mix approach is probably most suitable – we look after a portion of our portfolio, but hand over some of the most important decisions to a professional. This way we are involved enough to care and stay engaged, but not enough to do any harm. Think of it like being confident enough to book the flight tickets, but accepting that you’re probably not qualified to fly the plane.
The growth of DIY investing is great, but no one should feel that asking for help is wrong. Because there are some things that are too important to risk making a mistake with – like your retirement.
Avoiding the Obvious
There’s a saying in investment that “once you’ve heard about it, it’s too late”. This is the idea that if a stock has come on to your radar, the chances are it’s already on the radars of a lot of other investors too and the gains have already been made.
This isn’t always true, of course, and some stocks keep growing for years. You’d have been mistaken, for example, to believe that Amazon or Google were done growing by the mid-noughties.
But this adage does make you consider the value of looking outside of the obvious. And this week we did just that, by considering three stocks in the electric vehicle sector that – shock, horror – are not Tesla.
Tesla may well keep growing, but after its share price shot up 700% last year, it may be fair to assume that the easy gains have gone. This isn’t contrarian investing, it's sensible investing – a rising tide lifts all boats, and Tesla’s success will likely benefit other EV makers that are cheaper to buy.
Shops Still Suffering
As life starts to get back to the normal in the UK, I find myself wondering which companies will be opening their doors and getting back to business, and which may never lift the shutters again.
As I start to dabble with a return to office life, I notice that bars and restaurants seem to be thriving, while retailers are being sadly left behind. A lunchtime wander offers plenty of options for eating, but opportunities for some retail therapy are more limited than ever before. A Gap I used to frequent has gone, Accessorize has disappeared, and the HMV unit that shut up years ago remains empty. In my local high street, the number of vacant units and papered over windows is more than slightly worrying.
I keep reading reports and commentary from experts predicting a major bounceback in UK spending as we all look to splash our post-lockdown cash. That's going to be difficult if there are no shops left to do the spending in.
