DIY Investing vs. Pro Management: Which Team Are You On?

Hi Reader,

Welcome to The Money Series and if you are new here, thank you for signing up. Personal Finance can feel ambiguous and overwhelming, but I am here to help simplify the journey.

When it comes to investing, would you trust a professional to manage your investments or prefer to do it yourself? or maybe a mix of both?

Especially in the stock market, do you have a flair for picking stocks and identifying the next ‘Magnificient 7’ or would you rather play it safe and invest in a diversified, pool of funds?

This week, let’s examine stock market investing and how to choose your preferred approach for investing.

Saving is great but investing is what grows your wealth. Your savings are limited by what you set aside, but investments can multiply your money through the power of compounding.

For example, if you save $100 per month, that’s a maximum of $1,200 a year or $6,000 in 5 years. But if you invest and earn an average return, your $6,000 could grow significantly beyond that.

There are two main approaches to stock market investing:

1. Direct stock picking

2. Investing in pooled funds managed by professionals

Let’s break these down.

The Direct Approach (Stock Picking)

This is a hands-on method where you:
✅ Open a brokerage account
✅ Choose the stocks to buy
✅ Decide how many shares, entry price, and when to sell

You control every decision which can be both exciting and time-consuming. If you’re not a numbers person or don’t enjoy analyzing companies, this approach can feel overwhelming.

Some investors rely on stock recommendations from analysts (usually for a fee), but you still make the final calls on what to buy, sell, and when.

The Indirect Approach

If you prefer a hands-off strategy, then pooled funds might be for you. Here’s how it works:
✅ You invest in a mutual fund, ETF, or index fund
✅ A professional fund manager makes the decisions
✅ You benefit from diversification and expert oversight

You can even automate contributions; set up a monthly debit of $100, and you’ll be investing while you sleep. This builds consistency and lets compounding work its magic.

The downside of this approach is that you give up control over individual stock picks. The fund follows its stated investment strategy, and you agree to that when you invest.

Do You Have to Choose Just One?

Not at all! You can combine both strategies:

✔ Automate contributions into pooled funds for steady growth

✔ Pick individual stocks for higher-risk, higher-reward plays

This hybrid approach balances control with convenience.

TL;DR – Which Should You Choose?

• Direct Stock picking: Great if you love research, want control, and can handle risk

• Pooled Funds: Best if you prefer simplicity, diversification, and automation

Reflect on This:

• Which approach is best for you?

Till next week, I am rooting for you, money-ly!

Dee

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Disclaimer: This does not constitute financial advice. Please conduct your research or consult your financial advisor for important financial advice.