Know Yourself: 5 Qualities Direct Investors Share
Written by The Content Team | Published on September 7, 2018
Written by The Content Team | Published on September 7, 2018
Wondering if you have what it takes to manage your own investments? Before you jump in, consider these five things to help determine if direct investing works for you.
No one cares about your financial success more than you do. By doing it yourself, you're in control of your money and you might save on fees, which can potentially mean larger returns.
Most people emphasize the technical aspects of investing – choosing investment products and strategies, reading annual reports and financial statements – but emotions can also impact investment outcomes.
It's relatively easy to stick to an investment plan – until there's a sharp change in market direction. How would you respond to big uptick or downturn, or to a hot stock tip from a friend? As a do-it-yourself investor, you have to navigate these situations without input from a professional advisor. If you're unsure of your emotional and behavioural tendencies, treat yourself as a test subject. Start a risk-free practice account or open a small investing account, so you can observe your reactions to market and business cycles. Understanding your tolerance for volatility will help you avoid common investing mistakes.
Are you naturally curious? Do you enjoy reading and doing research? As a do-it-yourself investor, you'll need to stay on top of market and business news. Lifelong learning is key to successful investing. And often, investors who have a personal interest in a particular sector or cause like to explore how it could fit with their investment goals.
If you become a self-directed investor, you will need to follow financial news, monitor the performance of your investments, research new investment possibilities and rebalance your accounts. Ask yourself: “Do I want to make the time? Is being a self-directed investor right for me?" How much time you need will depend on your investing style.
Most people wouldn't go on a road trip without a map, yet many self-directed investors jump in without a plan to guide their decisions. Your financial goals, budget, life stage and tolerance for risk are just some of the factors to consider. Don't skip this step – having an investment plan will also help you stay the course during market turbulence.
RBC Direct Investing Inc. and Royal Bank of Canada are separate corporate entities which are affiliated. RBC Direct Investing Inc. is a wholly owned subsidiary of Royal Bank of Canada and is a Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. Royal Bank of Canada and certain of its issuers are related to RBC Direct Investing Inc. RBC Direct Investing Inc. does not provide investment advice or recommendations regarding the purchase or sale of any securities. Investors are responsible for their own investment decisions. RBC Direct Investing is a business name used by RBC Direct Investing Inc. ® / ™ Trademark(s) of Royal Bank of Canada. RBC and Royal Bank are registered trademarks of Royal Bank of Canada. Used under licence.
© Royal Bank of Canada 2018. All rights reserved.
The views and opinions expressed in this publication are for your general interest and do not necessarily reflect the views and opinions of RBC Direct Investing. Furthermore, the products, services and securities referred to in this publication are only available in Canada and other jurisdictions where they may be legally offered for sale. If you are not currently resident of Canada, you should not access the information available on the RBC Direct Investing website.
Testing your knowledge can help reinforce what you know, and may teach you a few things too.
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