Letting an experienced wealth manager handle investments used to be common sense. However, with the development of the internet and the popularity of DIY investment sites, more and more people are opting to take their wealth into their own hands. While we understand the temptation and the thrill of managing your own investments, there are a few dangers you should be aware of before taking the plunge.

Timing Matters

Making the right investments to see a high rate of return is all about timing and reading the market as best as possible. Unless you’ve worked in the financial industry for many years, you’ll likely find it a difficult task to spot trends and make the right call. As experienced wealth managers, we have seen the market rise and fall, and can offer advice on whether or not it’s time to sell or simply a wave to ride out. Remember, articles and news clippings can only tell you so much.

What Investments to Make

The market changes, sometimes on an hourly basis. If you’re relying solely on investing in companies you believe will be profitable, you probably won’t see much of a return. This strategy may seem rewarding initially, but often involves little planning for the future. Our wealth managers will examine your portfolio and will come up with an investment strategy designed to help you meet your goals. We’ll consider your risk tolerance to determine the right investment plan based on what you wish to achieve. Our goal is long-term growth, not short-term returns.

Lack of Familiarity with Taxes

DIY investors may not always be familiar with the tax code or the implications their investments will have on what they owe at the end of the year. Each investment you make has the potential to change how much you owe. One high-dividend payout can become a taxable event for the end of that year. Experienced wealth managers will be able to communicate any changes in tax liability to you as they occur with your investments. This simplifies your accounting at the end of the year and helps you better allocate your funds in the interim.

Trends in Performance

DIY investors often make decisions based on the initial and immediate performance of their investments. If something is not earning what they believe to be a fair amount, there is a temptation to sell the shares and move to something else that looks promising. Wealth managers do care about performance, but we’re interested in long-term performance, not immediate return. We want to see your wealth grow and often, that takes time. Making impulsive decisions is one of the quickest ways to lose out on an investment with a promising future.

Investing is Difficult

Investing online is as simple as clicking a button, but it might not pay off to the same extent. DIY investors generally do not have the experience or the training necessary to see continued and sustained growth in their investments. It’s not just about clicking a button and investing in the latest startup venture. It takes knowledge and experience to make decisions that will allow your wealth to grow.

 

At Black Harbor Wealth Management, we’ve helped many people in South Carolina grow and manage their wealth and successfully plan for a retirement that they can enjoy. We want to help you plan for your future safely and securely. Contact us today to schedule your complimentary consultation. Whether you’re interested in wealth management, retirement planning, annuities, or alternative investments, Black Harbor Wealth Management is here to help you handle the details of your investments.