The most important decision you have to take about investment of your personal wealth is whether to manage it yourself, have others do it for you, or perhaps go for a combination of the two approaches.

Like just about everything else to do with investing, there’s a risk/return trade-off. Doing it yourself is higher-risk, especially in the earlier years when you’re building experience. But it should ultimately deliver bigger returns.

Every professional in the investment business will tell you that you must use a professional rather than doing it yourself, because of the expertise, access to information and facilities such as massive computer power, required. But then they would say that, wouldn’t they?It’s true that you, as an individual investor, lack many of the advantages of a professional manager. But it’s also true that you have some advantages of your own:

As it’s your money, you’ll remain intensely focused. You can monitor your affairs much more closely, on a daily basis if needs be. No professional manager could afford the time to do that for you alone.

You don’t have to match performance to benchmarks unless you wish to, so you can have longer-term time horizons and set different goals.

There is no public scrutiny of your holdings, so you don’t have to worry about others taking your ideas, perhaps moving the market against you if you need time to accumulate a holding.

David Fuller's view

Here is a copy of On Target.

Among the most knowledgeable investors that I meet are very successful people who spent much of their adult life in other careers.   They may have sold their businesses or scaled down commitments to spend more time concentrating on their personal investments.  Obviously there will be a vast difference in the overall experience of these people, relative to those in a much earlier phase of their adult lives. 

Those who are interested in global events may be drawn to top-down, macro investing.  In other words, they may choose countries in which to invest, in addition to sectors.  Price charts help them to keep tabs on these markets. 

One of the most important realisations is that one does not need to know everything to be successful.  In fact, any investor, no matter how experienced, only knows a tiny amount of all the information which may be available to equity investors.  However, the most important decision may be in deciding where and when they wish to invest. 

Once those decisions are made, they may vary their approach by choosing low-cost investment trusts or backing long-only fund managers who have successful track records over time.  Those who enjoy a more hands-on approach may also choose to select the individual shares in which to invest.    

Please note: I will be away on Friday but back on Monday.