Why a hybrid approach may not be quite as it seems
DIY investing has exploded its way into normalcy, which means we no longer have tedious arguments about whether people without advisers are acting irresponsibly.
Example One: Hybrid investors are twice as likely to trade options and derivatives than DIY-only investors. Fifteen per cent of DIY-only people in the survey had applied for accounts to trade these securities, compared to 28 per cent of hybrid investors. In a backhanded way, the numbers for DIY and hybrid investing are an endorsement of having an adviser. It seems that if you have someone managing your investments, you’re more confident than pure do-it-yourselfers. In fact, the FAIR survey identified a sub-group of DIY-only individuals called the “inexperienced overwhelmed investor.”
If you’re a hybrid investor trading options or buying stocks on margin, do yourself a favour and tell your adviser what you’re up to. You might get some useful input and, at very least, your adviser will have a better understanding of your financial risk profile.
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