Wednesday, 25 January 2023 12:35

Should You Manage Your Own Stock Portfolio?

By  Jessica Perkins

Over the years, investing in the stock market has become increasingly accessible to everyday investors. With the rise of online brokerage platforms and the ease with which trading accounts can be opened, buying stocks online has become a seamless and convenient process. 

As such, many investors are faced with the decision of whether to manage their stock portfolio or seek professional help. In this article, we will discuss the merits and drawbacks of trading and managing your portfolio when it comes to investing.

Merits of Managing Your Own Stock Portfolio

Sense of control and empowerment 

By actively engaging in different personal research and making your own financial decisions, you are in total control of your financial destiny. You can choose to invest in any company or sector that aligns with your values and beliefs while making investment decisions that reflect your risk tolerance and different financial goals.

Learning About The Financial Markets

By actively managing your investments, you develop different crucial skills that will help in making important investment decisions in the future and also a deeper understanding of how the stock market works. You also learn how to analyze financial statements and market trends.

Achieving your financial objectives and accumulating long-term wealth can be made possible by this knowledge and experience.

The potential for higher returns

While investing always comes with some degree of risk, a well-diversified portfolio with carefully chosen stocks has the potential to outperform the market and generate significant returns over the long term.

By doing your research and analysis, you can uncover hidden gems that the professionals may have overlooked, providing the opportunity for superior investment returns.

Drawbacks of Managing Your Own Stock Portfolio


Individual company research, financial statement analysis, and market trend watching can all take a significant amount of time and effort. Furthermore, investing involves discipline and patience, and maintaining a long-term investment strategy in the face of short-term market changes might take time.

Emotional decision-making 

Casual investors can be tempted to make impulsive decisions based on fear or greed, leading to poor investment outcomes. Professional financial advisors, on the other hand, are trained to take a disciplined and objective approach to invest, focusing on long-term goals and risk management.

 Lack of diversification

Individual investors may be more prone to investing in a few companies or sectors that they are familiar with, resulting in a portfolio that is not well-diversified. This lack of diversification can increase investment risk and potentially lead to significant losses if those particular companies or sectors underperform. 

Professional financial advisors, on the other hand, are trained to create well-diversified portfolios that are designed to manage risk and achieve long-term investment objectives.

Ease of Buying Stocks Online

Despite the potential challenges of managing your stock portfolio, buying stocks online has become easier and more convenient than ever before. 

Most online brokerages offer user-friendly platforms that allow investors to easily buy and sell stocks with a few clicks of a button. Moreover, many online brokerages offer commission-free trading, making it more affordable for individual investors to trade stocks.

Opening a brokerage account is also a simple process that can be completed entirely online. Investors can easily open an account, fund it with a bank transfer or credit card, and begin buying stocks online within a matter of minutes. 

The convenience and accessibility of online trading have democratized investing and made it possible for anyone to participate in the stock market.

Things to Consider When Deciding Whether to Manage Your Own Stock Portfolio

If you're considering managing your stock portfolio, here are several factors to consider before making a decision. 

Assess your knowledge and experience with investing

Do you have a solid understanding of financial markets and investment principles? Are you willing to devote the time and effort needed to research companies and analyze their financial statements? 

Consider your risk tolerance and financial goals

Are you comfortable taking on the risk associated with individual stock investing, or would you prefer a more conservative approach with a focus on long-term wealth building? 

Tax Implications

When managing your stock portfolio, you are responsible for managing tax implications, such as capital gains taxes. This can be particularly complex if you're actively trading and making frequent buys and sells. 

Time And Effort

Managing your portfolio can be time-consuming with different tasks like researching stocks, monitoring market trends and economic news, and making investment decisions. 

Opening a Brokerage Account to Buy Stocks Online

The first step in trading and managing your portfolio personally is creating a brokerage account online. Brokerage accounts allow individual investors to participate in buying stocks online, as well as access a range of other investment products and services. 

To open a brokerage account for buying stocks online, you'll typically need to provide personal information, including your name, address, and social security number. You'll also need to fund the account with cash or securities, which can be transferred from an existing account or deposited directly into the brokerage account. 

Once the account is open, you can begin buying and selling stocks online through the brokerage's trading platform. 

It's important to note that different brokerage firms may have varying fees and commission structures for buying stocks online, so it's important to research and compare options before selecting a brokerage firm. 

The Role of Professional Financial Advisors in Investing

For people who lack the skill and knowledge to personally manage their portfolios, financial advisors can provide guidance and advice to help investors make good business decisions that align with their financial goals and risk tolerance.

Financial advisors can also help investors create a well-diversified portfolio that would be designed to manage risk and achieve long-term investment objectives. 

Additionally, they can provide ongoing support and advice, helping investors stay disciplined and focused on long-term goals in the face of short-term market fluctuations. While working with a financial advisor may come at a cost, the potential benefits of their expertise and guidance may outweigh the cost in the long run.




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