Most do-it-yourself (DIY) investors regret not mapping out a game plan before investing, finds a poll released today.
A TD Waterhouse DIY Investor Poll found 63% of Canada’s online investors say the biggest lesson they’ve learned is to be prepared. Almost one-quarter (23%) say they bought a hot pick without doing sound research beforehand; two in ten (21%) say they started purchasing investments without having a defined plan; 10% say they bought when the market was at its peak; and 9% say they reacted too quickly when the market dipped.
“Investors know the importance of planning ahead, but in the moment can be swayed by a new trend or react quickly to short-term volatility,” says Kerry Peacock, Executive Vice President, TD Waterhouse Discount Brokerage. “The key is to have a plan and understand what you’re investing in and how it aligns to your goal.”
This is where advisors can add value. Some don’t mind giving brief thoughts on a client’s DIY investments if it’s a small portion of the overall portfolio.
While online investors say DIY investing is more convenient, easier and they are more comfortable managing their portfolios than expected, more than half (58%) say their biggest challenge is deciding what to invest in.
“As an online investor you make the decisions yourself, but leveraging tools like investment screeners provided by your brokerage that can narrow down potential options by sector, geography, asset class and a number of other factors based on your criteria, can help to sort through the choices available and select investments that match your goals,” adds Peacock.
By gaining experience, online investors also gain confidence in their ability to manage their investments and work towards their goals. Ninety-four percent of online investors with six to ten years of experience say they are confident in their ability and knowledge of online investing, compared to 82% of online investors with five years’ experience or less.