Perhaps the most overlooked aspect of personal investment management is the incredible waste of time. With investing less is more.
On average over time, people are exposed to less risk and get better net investment results after investing costs and taxes are considered, when they invest in a globally diversified, passive index fund portfolio that they (or their advisers) do not keep changing.
Less is more when you buy and hold and hold and hold a portfolio with an asset allocation that is appropriate for your investment risk tolerance. The financial research literature repeatedly demonstrates this.
The only reasons why the active management “debate” never seems to be settled is that those who make money off of other people’s money keep telling people to do something rather than do nothing
The foregoing does not explicitly measure the time-efficiency of individual investor investing activities. With professional investors, you can evaluate investment performance over time relative to incremental costs and taxes. When this is done in careful investment research studies, investment professionals tend not to look so professional or so valuable after all.
Without the details, do-it-yourself individual investors make all sorts of investment errors the result is usually either no benefit or negative results for the effort expended. No sane person would work for an employer who paid them a zero dollar or negative hourly wage, but millions of amateur investors do this to themselves.
They keep fooling themselves, because few ever bother to compare their results carefully against a low-cost, fully passive, and totally hands off index fund investment strategy. It is quite likely that by not wasting your time to under-perform a passive index fund portfolio, you will instead actually be paying yourself to do something that you enjoy doing far more than amateur investing.