Taking Control Of Your Stock Portfolio: Should You Be Your Own Investment Manager?

Posted on Aug 29 2013 - 3:27pm by Jeremie Brenton

Wheel of fortune

Now more than ever before, a wide variety of financial resources are available to the general public, providing the basic information necessary to begin an investment portfolio. Many individuals that have become successful investors claim to be self-taught, learning how to be their own investment manager through tutorials available on the internet and by reading textbooks and manuals available at their local libraries. To many of us, this success sounds too good to be true, but more seasoned economic experts are not surprised by this developing trend.

It was only a matter of time before the ever-popular, do-it-yourself trend took hold within the field of investing. Before jumping headfirst into your new role as stock portfolio manager, though, you must consider your own strengths and weaknesses in order to determine whether such an opportunity is right for you. Are you willing to study and engage in the background research, to honestly judge your own confidence and emotional volatility?  For many eager individuals, taking an online course in investment basics is a great first step towards the goal of stock portfolio management.

Managing Your Emotions and Anxieties: Understanding Your Own Limitations

Investors note that one of the biggest challenges in their work is not management of their stock portfolio, but management of the emotional reactions that arise due to  the stress of their job. A successful stock portfolio manager is able to discipline his or her mind, not allowing emotions to influence critical stock management decisions. Whether overly-optimistic or pessimistic to a fault, extreme emotions should be avoided at all costs while on the job. Such effort requires intensive work on the part of the burgeoning investor, and is difficult to learn through studies or even imitation. If you believe that maintaining an even keel might be too much of a challenge for you, it might be best to leave stock portfolio management in the hands of the professionals. Emotional volatility or, in other words, experiencing the extremes of anxiety, fear, and elation while working, can lead to both faulty decision-making and a variety of health issues. If you determine that you have the rationality and logical mindset necessary to make investment decisions while controlling your emotional outbursts, you have the natural disposition to succeed as a portfolio manager – and you will be more likely to remain stress-resistant while on the job.

Education: The First Step to Investment Independence

After an honest analysis of your personality and emotional makeup, a smart next step would be committing to training and coursework in investment management. Before rushing to cut out the middleman, be sure to spend adequate time developing your skills with confidence and guidance. A penchant for lifelong learning is the mark of a successful stock portfolio manager. Think about registering for classes in finance at your local community college or in online learning formats. Supplement your in-class education by seeking out opportunities for internships or apprenticeships with investment managers. In exchange for your services, they might be willing to show you the ropes on the practical side of investing, so you can continue to build your skills in mathematics and economics even after you close the books.

Seek out investing options that require a minimal time investment each month, so that you have plenty of free time to continue your studies in investment management. Experts agree that covered call options are fantastic in terms of leading to profits – but only if you are equipped with the proper education to make the fast-paced decisions necessary. It is critical for investors to be aware of what stocks are optimal for covered call transactions, and that they are well-versed in the defensive techniques that effectively prevent unwanted, unprofitable callouts. However, those who are willing to dedicate time and energy to mastery of these techniques can gain a 10% profit each month.  Whether or not you ultimately decide to manage your own investments, or continue working with a financial advisor on your stock portfolio, you may find yourself feeling more empowered as an investor equipped with the education necessary to understand the inner workings of the stock market.

Photo Credit: Flickr/Zdenko Zivkovic

About the Author

Jeremie Brenton is a freelance blogger with an interest in technology and economics. You can contact him at jeremie.brenton@gmail.com or add him on Facebook.