Becoming a Do-It-Yourself Investor or popularly known as a DIY investor is trending a lot these days. A DIY investor is somebody who manages his/her own investment portfolio. No advisories, no consultancies, just your gut feeling leading the way. Investing in any type of asset or commodity comes with a lot of pros and cons. Nothing great was built in a day and thus becoming a good investor who invests in minimizing risks and maximizing profits will take a certain amount of time and experience. 

DIY investors are also known as self-directed investors who use discount brokerages and virtual platforms for their trading needs. Instead of engaging in full-service brokerage or professional help, they mend their own way into the world of trading. A lot of budding DIY investors have been using online investment tools that help them to place their bids. No matter which tool or app you use, without proper knowledge and analysis, you are just trading based on your luck. 

Keeping in mind the recent scenario, everybody wants to invest some part or the other of their income into anything productive that can be used at desperate times. Investing in shares and other commodities have been on the top. If you too want to be a DIY investor and put a part of your hard-earned money into something that gives back good returns, then this article is the perfect guide for you to start your DIY investing journey.

  1. Sowing the seeds of investing- Being a successful investor is like running a marathon. It is not a sprint race that starts and finishes in one go, rather, this is a long-term process that requires a lot of patience, time, and other resources. The first step is to set a budget for investing. How much are you willing to invest in the market, should be the first question you ask yourself after checking your bank balance of course! 
  2. Understand the working of the market- Investing is a combination of both science and art as it has financial aspects like scientific theories and guts feeling trades like artistic fundamentals. Don’t worry if you are not good at the theoretical part as a lot of share market courses online impart in-depth knowledge of the same. One among them is a live course of share market conducted by The Chalaang. This course will not only help you in understanding the theories of the share market but will also teach you the practical aspects and that too in the live market. 
  3. Devise an investment strategy- Being a DIY investor is appropriate for anybody who knows how to do thorough self-introspection and nobody can know you better than you do. With just a little help, you are all set to step foot into the market and stay for a long time. In case you are unable to grab the personality traits that might be holding you back, here’s a behavioral model that has helped a lot of investors and might of your help too:-

    This model was developed by Tom Bailard, Larry Biehl, and Ron Kaiser, which helps investors in understanding their behavioral traits. Each category of investors has certain characteristics and they are:-
    Individualist – cautious and self-assured, usually takes a do-it-yourself way
    Adventurer – dynamic, business-minded, and determined
    Celebrity – somebody who walks on established paths shown by others
    Guardian – highly unwilling to take risks
    Straight Arrow – has all the above traits
  4. Know how to maintain a balance between your Equity and Debt ratio- After understanding your investing behavior and setting up a definite budget, you are all set to step into the world of trading. These roads have a lot of road bumps and thus you must know what you are putting yourself into. As a budding investor, you must maintain a diversified portfolio that can mitigate your risks. In the initial phases, it is recommended to build strong equity investments and then eventually go for debt securities. Both equity and debt instruments have their set of pros and cons, you must study them well enough before investing in either of them as you are Doing It Yourself. 
  5. Choose a good real-time or virtual assistant- As a budding investor with nil or minimum experience, it is advised to take professional help in the beginning. Choose an expert that has the prominent experience to help you in becoming a DIY investor. You can also go for online assistance imparted through apps and Robo advisors. Don’t just invest your money, but also your time and efforts to learn and earn from a side hustle.