Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing.

Common mistakes made by DIY investors

For some, investing is a hobby that they enjoy. However, some people do not take enough time to learn all their investment options and understand which options are suitable for their circumstances.

Some workplace pensions have the flexibility for you to choose your own investments which could be costly as without taking having enough financial knowledge to make informed decisions you could be risking your pension pot.

What is DIY investing?

DIY investing is where individual investors choose to manage their own investment portfolios and make investment decisions.

Here are some costly mistakes often made by DIY investors.

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Failing to diversify

DIY investors often hold shares in a few big brand names or inherit investments from family members. Only having a few different holdings is putting your money at unnecessary risk. A diverse portfolio should have at least 30 holdings.

Too reliant on the UK

It is common for DIY investors choose to invest in companies that they know such as UK equities. However, only investing in one stock market increases the amount of risk you are taking with your money.

Spreading your money across different markets reduces risk and can be achieved by investing in a global fund.

Not spreading money around

Many DIY investors do not diversify the assets they hold. For example, they do not consider all the investment options available to them such as bonds, investment trusts, exchange traded funds and commodities.

Not considering the overall spread of your investments can mean that you are increasing the amount of risk you are taking with your portfolio.

Buying or selling too often

Another common mistake made by DIY investors is that they check on their portfolios too frequently. When they see an investment growing, they sell too quickly meaning they do not take enough time to maximise opportunities for growth. Another downside is DIY investors often must pay for placing multiple trades.

Panic selling when worried

A mistake linked to checking their portfolios too often, DIY investors often panic sell investments if they see the value fall. Being a successful investor means you have to invest for the long term and understand that the stock market and investments can fall as well as rise. You have to be patient and focus on the future.

Failing to rebalance

DIY investors often choose new investments as a standalone decision, as opposed to choosing an investment that fits with their existing portfolio.

Fund managers change jobs or retire so it is important that you keep track of what is happening with funds you are in invested in so that you can change your holdings when necessary.
If you fail to do so, your portfolio may end up being less diverse that you originally planned.

You should review your portfolio at least once a year and hold a mix of investments and fund managers.

Don’t risk your financial future, find out if you could benefit from Financial Advice

At Four Wealth Management, our Financial Advisers are qualified in providing investment advice that is suitable for your individual circumstances.

The Financial Advice that you receive from a Financial Adviser at Four Wealth Management is backed by the St. James’s Place Guarantee which guarantees that the advice you receive is suitable for your circumstances to give you peace of mind.

St. James’s Place guarantees the suitability of the advice given by members of the St. James’s Place Partnership when recommending any of the wealth management products and services available from companies in the Group, more details of which are set out on the Group’s website at

The right investment strategy will help you to achieve your financial goals.

Find out more about investment planning with Four Wealth Management

To book a no-obligation review of your portfolio phone us on 0117 973 0500.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

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If you have any queries or would like to arrange a face to face meeting with an adviser for a no obligation review of your personal finances, simply book a call back using the form below. Alternatively, you can call us on 0117 973 0500.

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