As a follow-up to a recent article in The Globe and Mail, I wondered about posting another article that shares where I’ve fallen down – exposing some of my DIY investor mistakes. Here are a few common mistakes from that article and my assessment of them.
Lack of a sounding board
I’m actually using this blog, friends and family for sounding boards. I talk to others about their investing experiences (good and bad) and try to learn from everyone I meet. I think my approach is generally sound but I’m probably biased as are all DIY investors. To help remove this bias to my investing approach, I’m going to be indexing more as I get older and I may undertake a professional evaluation of my portfolio before retirement.
The article included this quote: “Everybody likes to talk about their winners, but you never hear about their losers.” Not true on this site. I enjoy the reality checks actually, they keep me honest.
Balance your life
100% agree. I spend a bit of time managing this site but barely any managing my portfolio, it’s largely on autopilot. I think I’m doing OK here.
For the most part I do, I don’t invest in volatile stocks.
Lack of a plan
I don’t have a written plan per se, so I fail here. This site is a record of my decisions and where my wife and I are planning to be. Probably not good enough though.
Failing to rebalance
The article stated “a common pitfall among do-it-yourselfers is to neglect revisiting your portfolio.” I revisit my portfolio but I do not rebalance my portfolio by selling assets. I tend to save funds where and when I can, then buy more assets (stocks and ETFs) every few months with the savings. I don’t have any bonds in my portfolio anymore.
Yes, there is lots of information that could be researched but I do very little of that – next to none now. Research is great to identify past trends and attempt to forecast the future but the reality is nobody I know can predict the future with any accuracy.
Don’t stick to one investment style
Keeping your emotions in check
I’m working on this constantly but I figure learning who you are and how you react to things is a lifelong journey. Financial stuff is just a very small part of that.
Make sure you keep your partner in the loop
I’m definitely the finance DIYer in the house but I do my best to share everything with my wife. At least if I forget something, she can always read it in my blogposts.
What DIY investing mistakes are you making? Do you know where your biases are?