By Jim Shellenberger, CFA, CFP®
Investing has become more accessible than ever before, thanks to online trading platforms and a wealth of available resources. As a result, many people have embraced DIY investing to take control of their financial future.
While this approach has empowered individuals to build their wealth, the hidden costs of DIY investing may be greater than you realize. In this article, we delve into the overlooked expenses and risks associated with managing your investments on your own, while offering guidance on how to refine your investment strategy for the best possible results. Whether you’re a seasoned investor or just starting out, understanding the true cost of DIY investing is critical to your financial success.
Advantages of DIY Investing
One of the primary advantages of DIY investing lies in the fact that managing one’s own finances can be empowering and rewarding. With this approach, you have full control over your investment decisions, allowing you to tailor your portfolio to your specific financial goals and risk tolerance.
Additionally, it can save you money in the short term by avoiding fees. Financial advisors typically charge advisory fees or commissions for their services, which can add up over time. But it’s also important to remember that DIY investing comes with its own risks and drawbacks.
What Are the Drawbacks?
Now that we know a little bit about the benefits of investing on your own, let’s take a look at the disadvantages and potential costs.
1) Time-Consuming
One of the most significant drawbacks of DIY investing is the amount of time and effort it can require. Unlike hiring a financial advisor who can manage your investments on your behalf, investing on your own puts the responsibility of research, analysis, and decision-making squarely on your shoulders. This means you’ll need to stay up to date with market trends, research potential investments, and continuously monitor your portfolio to keep it aligned with your goals and risk tolerance.
For the average person, this level of involvement can be time-consuming and overwhelming. With busy work schedules, family commitments, and other responsibilities, it can be challenging to find the time and mental energy to devote to managing your investments effectively. Many DIY investors often find themselves poring over financial reports, analyzing charts and graphs, and researching new investment opportunities late into the night, sacrificing precious time that could be spent on other hobbies or interests.
2) Potentially Emotionally Stressful
The responsibility of managing your investments and making crucial financial decisions can be overwhelming, especially when dealing with volatile markets or unexpected events that can impact your portfolio’s performance. Investors may experience anxiety, fear, or uncertainty, especially when faced with losses or unexpected changes in the market. You may also feel a sense of pressure to make the right investment decisions, which can lead to feelings of self-doubt.
Unlike working with a financial advisor who can provide an objective perspective, DIY investors may also become too emotionally attached to their investments, which often leads to poor decision-making. It’s possible they may hold on to underperforming assets for too long, ignoring warning signs or market trends, or make impulsive decisions based on emotions rather than logic. (1) In the end, the emotional stress of investing on your own can take a toll on your mental health, leading to burnout, anxiety, or possibly even depression.
3) Detracts From Important Areas of Life or Work
Going on your investing journey solo has the potential to detract from your personal or professional life, especially if you’re not prepared to handle the time commitment or stress that comes with managing your investments. For those with busy lives, this time commitment can take away from other important activities, such as spending time with family, pursuing hobbies, or advancing your career. This is why it’s critical to be realistic about the amount of time and energy you can commit to managing your wealth and make sure it aligns with your goals and priorities.
4) Costly
While investing on your own can potentially save money in advisory fees, it’s important to consider the potential costs and risks involved before deciding to go it alone. Many individuals who invest on their own have the idea that they’re saving money, but the truth is that it can be costly, especially for novice investors who lack experience or knowledge about investing. Without the guidance of a financial advisor, DIY investors may make expensive mistakes, such as buying or selling at the wrong time, investing in high-risk assets, or failing to diversify their portfolio. These mistakes can lead to significant financial losses, reducing the potential returns of their investments.
5) Suboptimal and Risky
Most investors who are not well versed in finance typically lack the expertise or resources available to professional financial advisors. While some DIY investors may have a basic understanding of financial markets and investment strategies, they may not have the in-depth knowledge or experience necessary to make informed investment decisions.
Financial advisors, on the other hand, have years of training and experience, as well as access to a wide range of investment research and analysis tools that can help them identify the best investment opportunities and manage risks. They provide a personalized investment strategy based on your financial goals and risk tolerance, which can help ensure you are investing in a way that aligns with your needs and objectives.
Understanding the Real Value of a Financial Advisor
At the core, a good financial advisor brings value in two major ways: growing your money (offense) and reducing your tax burden (defense). While these might sound straightforward, they involve both technical competence and an understanding of human behavior—helping our clients avoid emotional decision-making that could hurt their long-term goals.
Even the small, everyday financial choices people make—like how they invest, when they withdraw money, or how they structure their income—eventually add up and impact their bottom line. And that’s where a skilled advisor makes a real difference: implementing each decision in a way that works together to optimize your financial success.
Seek Support Today
If you’re like many of our clients, your busy schedule leaves little time to manage your investments. While DIY investing may seem tempting, it may not be the best fit for those who lack the time or experience to navigate the complexities of the financial markets. Some clients find that having a small DIY account that doesn’t affect their retirement, satisfies the desire to invest in some stocks on their own while not risking their future on it.
By partnering with a knowledgeable advisor, you can delegate the responsibility of managing your investments, giving you more time to focus on what matters most.
At Elevate Wealth Management, we tailor investment strategies to meet your financial goals and risk tolerance, offering ongoing support to help you stay on track through market fluctuations. For personalized guidance, schedule an introductory meeting by reaching out to us at jim@elevateasset.com or 307.673.5675.
About Jim
Jim Shellenberger, CFA, CFP® is a financial advisor at Elevate Wealth Management, an independent, fee-only wealth management firm serving young professionals, pre-retirees, and retirees in Sheridan, Wyoming, and surrounding areas. With the mission of serving and educating, Jim is dedicated to providing comprehensive, top-notch services that not only help his clients reach their goals, but also empower them to make the best financial decisions for their lives and walk toward their future with confidence. Jim is known for going the extra mile, not only offering valuable knowledge in investment management as a former investment analyst, but building long-lasting relationships so he can give honest, customized advice and strategies that make an impact on their lives.
Jim has a bachelor’s degree in business administration with a minor in finance from the University of Wyoming. He is proud to be a Wyoming native and loves exploring the outdoors with his family—hiking, fishing, hunting, and backpacking. Faith is an integral part of Jim’s life, and he always looks forward to attending church on Sundays, Bible study on Fridays, and being part of his church community. He’s also an avid sports fan! Fun fact: Jim owns shares in the Green Bay Packers. To learn more about Jim, connect with him on LinkedIn.
The views expressed represent the opinion of Frontier Asset Management. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Frontier Asset Management believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. The use of such sources does not constitute an endorsement. Frontier does not have an affiliation with any author, company or security noted within. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the Frontier Asset Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in securities involves risks, including the potential loss of principal. Past performance is not indicative of future results.
Frontier does not provide tax advice. Please consult with a CPA for recommendations pertaining to individual circumstances.
Elevate Wealth Management is the financial planning division of Frontier Asset Management. Frontier Asset Management is a Registered Investment Adviser with the Securities and Exchange Commission. The firm’s ADV Brochure and Form CRS are available at no charge by request at info@frontierasset.com or 307.673.5675 and are available on our website www.frontierasset.com. They include important disclosures and should be read carefully. 20250408.11111
____________
(1) City National Bank, “How Emotions Influence Your Financial Decisions,” 2025