Investors Are Doing Fine as Their Own Money Managers
Everyone has access to low-cost do-it-yourself options, and more people are avoiding traditional pitfalls.
Investors are becoming savvier.
Photographer: Topical Press Agency/Hulton Archive/Getty Images
Now that the bear market is officially over, with the U.S. stock market having reclaimed its pre-coronavirus peak in August, it’s a good time to ask how well investors navigated the market’s breakneck plunge and recovery, the fastest round-trip on record. The answer may inform another question that is increasingly on the minds of individual investors: whether to hand their savings to a money manager or invest it themselves.
Investors have never had more places to put their savings. Money management was once reserved for the well-heeled, but now everyone from Wall Street banks to discount brokers to fund companies to independent robo-advisers will happily look after anyone’s money, no matter how modest the sum. Alternatively, do-it-yourself-minded investors can purchase low-cost exchange-traded funds that track broad stock and bond markets on Robinhood and other free trading apps, which is cheaper than paying a money manager.