Managing Investments Can Be easy

"Mad Dogs" print by Jack Vattriano - bouquiniste stall in Paris

Step-by-Step Suggestions

If you're reading this post, chances are high that you're capable of managing your own investments and increasing your long-term results. You may even enjoy the process. For help getting started, consider the monthly step-by-step suggestions provided below. Note: "Managing your own investments" is a loose description that will probably mean different things to different people. The suggestions listed in Months 1-8 do not involve any buying, selling or trading; they're more about understanding, learning and analyzing. Just by following those suggestions, I can almost promise that you'll make better decisions about your finances in the future, even if you stop there. 

There are multiple advantages to managing your investment portfolio yourself; one of the biggest is that you'll save the annual fees many financial advisors charge; they usually vary from 0.5-2% of your portfolio value. These fees may not sound like much, but if you run the numbers, you'll see that these seemingly "small" figures add up to a lot of money over time.

Many people believe that financial advisors who charge fees based on portfolio value enable them to "beat the market", and the fees paid to these advisors are recouped through higher returns. But studies show that beating the market is not the norm. In fact, over the last three years (as of Mar 2025), only 15% of Large-Cap* mutual funds "beat the market". So, if you're invested in a Large-Cap stock mutual fund, and it's not an S&P 500 Index Fund, there is an 85% chance that your investment underperformed the market. i.e. You paid someone to help you underperform the market in the long-term.
*Large-Cap: A large-cap stock represents a publicly traded company with a market capitalization (total value of outstanding shares) of $10B or more (often considered a stable and established investment). 

Performance of
​Large-Cap Funds vs S&P 500
1 Year | 3 Years | 5 Years | 10 Years

Interactive Chart

Years ago, a co-worker told me, "You're probably smarter than your financial planner." That was a real thinker. Over time, we learned enough to realize that investing didn't need to be complicated, nobody cares more about the outcome of our investments than we do, and self-management guarantees that we can save 0.5-2% of our portfolio value each year (because we avoid yearly AUM fees). So we started down the path of managing our own investments and have never looked back. The following suggestions may enable you to increase the likelihood of improving your long-term investment returns too.

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Step-by-Step Suggestions for
​Managing Your Investments

Disclaimer: I'm learning as I go; not a financial advisor. Please challenge these ideas by posting comments below so that we can all learn more and/or understand another perspective. 
Compare these ideas with advice you collect from the Internet, friends, relatives, co-workers and financial advisors. The goal is to help you understand that you can do this and to spark your enthusiasm.

TAXES:  Don't sell any assets based on this advice until you've reviewed the Month 8: Tax Considerations section.

IF YOU'RE YOUNG (or any age) and think the info below is too vague, you can read More About Investing and Saving for a little more explanation.

Hopefully the suggestions below will enable you to save a lot of money by taking control of your investment portfolio within a year or less.
You can:

• Work the steps faster (or slower) than the suggested monthly pacing
• Research topics that confuse you
• Ignore ideas that don't meet your needs
• Work the steps in a different order
• Pose questions and/or offer suggestions via the comments below

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Create a Simple List

• Make a list of all of your financial asset accounts (it's OK to start with an incomplete list)
• Include this info:
  -- Account Name/Description
  -- Institution holding the asset(s)
  -- Account Numbers
• Using a spreadsheet isn't necessary, but will be helpful later 

Example List of Financial Asset Accounts

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Add More Info to Your List
Following the example below:

• Describe the financial asset(s) within each account on your list
• Categorize the funds as Cash, Stock, or Bonds
  Cash = Checking & Savings accounts, CDs, Money Market accounts, T-Bills, etc.
  Stock = Individual Stocks, Mutual Funds, ETFs, Index Funds, etc.
  Bonds = Individual Bonds, Bond Funds, etc.
• Describe each category, description and fund within a given account
  -- Asset accounts are listed in a row on the left
  -- Asset categories, descriptions, and fund names are listed in columns along the top.

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Record the Value of Your Accounts and Funds
As shown in the example below:

• Enter the value of each fund on your list 
• Calculate the percentage of total assets held as Cash, Stock and Bonds in a spreadsheet (as shown below) or you can use an online tool like the Morningstar® Instant X-Ray™.
• Save a copy of this file at least once a year, so that you can track your progress for self-encouragement!

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Analyze Your Allocations

• What percent of your portfolio should be in cash vs stock vs bonds?
  ​Advice is easy to find based your age and goals. Example advice: Asset Allocation
• Many believe that money you’ll need within 5 years should not be invested in the stock market because the market can be volatile in the short-term. Some think it's OK to invest that money as long as some of it is also invested in bonds to balance the risk.
• ​You may want to set short term goals to balance your portfolio. i.e. Maybe you need to build up cash reserves, invest more in stocks and/or bonds, or just continue investing at your current rate and ratios.

Sample Asset Allocation Recommendations for Retirement by Age

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Analyze Your Stock Holdings

• Few Large-Cap mutual funds "beat the market" over the long term (i.e. produce larger returns than the market in general). This is why many investors simply invest in market-based “Index Funds”.
  ​You can learn more about them here: What is an Index Fund?
• Many US investors think it's also smart to invest in one or more International Mutual Funds. 
  ​This is a form of diversification.
• Investing in individual stocks is risky, but there are a few reasons to consider it under certain circumstances. 
  e.g. If your employer offers an attractive stock purchase plan that enables you to purchase company shares at a discounted rate, it could be smart to exercise this valuable benefit because most investment experts advise against walking away from "free money"!
• Investing in an S&P Index Fund or a Total Stock Market Index fund and an International Index Fund is all most people need in terms of stock holdings.
  ​Example S&P 500 Index Funds: 
  Fidelity, Vanguard, Schwab
• You can compare your current fund's/funds' long-term performance to an S&P Index Fund here: Compare

The stock market is a device for transferring money from the impatient to the patient. 
-- Warren Buffet

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Analyze Your Bond Holdings

• Bonds soften the volatility of an investment portfolio because they don't move as dramatically as stocks do, and they tend to move in the opposite direction of stocks.
  e.g. When the stock market goes down, the bond market tends to go up and vice versa. 
• Just like a market-based Index Fund provides solid value, a "Total Bond Index Fund" can round out your portfolio and is all most people need in terms of bond holdings.
  
  ​Example US Bond Funds: 
  Fidelity, Schwab, Vanguard

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Analyze Your Cash Holdings

• Cash you'll need within the next 6-12 months is often stored in a checking or savings account for easy access
• Cash you'll need in 6 months to 3-5 years may earn more interest in a CD, Money Market Account or T-Bill
• Do you have enough cash to meet your needs or more or less than you need?
• Do you have an Emergency Fund set aside?

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Tax Considerations

• When you sell financial assets, it's smart to consider the tax implications.
  e.g. Moving assets within a single retirement account shouldn’t affect your short-term taxes, but selling assets outside a retirement account or from one retirement account to another could have big tax implications at the end of the year. 
• This topic can get complicated. You can learn a lot about it on the Internet, via YouTube, from books and from people. If you have questions or concerns it might be worth paying a tax expert to look at your situation and provide you with advice. You'd want to pay by the hour, not a recurring fee based on the value of your assets.

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Simplify 

• Needless complexity is a waste of time. Is there a way to simplify your list?
  e.g. Combine accounts? Transfer money from one fund to another? Are multiple funds and/or accounts serving the same purpose but costing you needless time?
• Simplify your list, if needed, by consolidating your assets into fewer accounts always remembering to keep tax implications in mind. Remember:

Don't sell any assets 
based on this advice 
until you've reviewed the
​Month 8: Tax Considerations section.

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Adjust Your Allocations, if needed​

• If your investment allocations (cash vs. stock vs. bonds) don't align with your goals (see Month 4: Analyze Your Allocations), you may want to adjust your allocations and/or invest in a way that balances your portfolio over time.
• REMEMBER to consider the tax implications described in Month 8: Tax Considerations. 

Don't sell any assets 
based on this advice 
until you've reviewed the
​Month 8: Tax Considerations section.

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Think About Your Goals for the Future

• Manage your investments in a way that enables you to live your best life!
• Think about how your investments will help you live the life of your dreams. e.g. Preparing for retirement, educating yourself and/or others, traveling, purchasing a home, starting a business, and/or being a generous human.
• Start playing with investment calculators and tools to better understand what it will take to achieve your goals.

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You're Managing Your Own Investments

• Review your portfolio on a regular basis to be sure your funds are continuing to meet your financial goals. (Quarterly? Annually?) 
• Does this advice make sense? Can you think of ways to improve it? Maybe you've concluded that you're willing to give 0.5-2.0% of your portfolio's value each year to a financial advisor who can manage things for you. If you enable them to manage your assets for 10 years, there's a (small) chance they'll be able to "beat the market" enough to cover the costs of their fees.
• Here are links to help you learn more (not in any order):
  -- Why You're Likely Better Off Investing On Your Own
  -​- Jill on Money (interesting/entertaining podcasts, videos and more)
  -- Investing Rules of Thumb
  -- Investing for Beginners
  -- Expense Ratio
  -- Bogleheads
  -- Don't Panic When the Markets Are Down​
  -- Die with Zero (I haven't read, but find the concept intriguing)

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On a more personal note ...
​Jim's been managing our investments for about 35 years, while I managed our budget. Since retiring, I've been learning more about our investments. This post is a result of my high-level learnings and desire to share the information in easy-to-understand and actionable bites. You may be relieved to hear that Jim has reviewed (and improved) the information.

And while we don't pay a regular fee to have someone else manage our portfolio, that doesn't mean we don't seek advice regularly and/or pay for advice on occasion; we do both. Most recently, we paid to talk with Mark Zoril and we regularly talk with our Fidelity advisor (who doesn't charge a fee), as well as friends and family.

As I stated at the beginning of this post, we're not professionals and don't claim that this is the only or best way to manage investments. Instead, we offer this up as food for thought and an invitation for you to share what you know. We hope to learn from you.

-- Kathy

Frequently Asked Questions

Q:  Why did you document this info?
A:  I've been learning more about investing, and this info reflects what I've internalized so far. If you have ideas that will help us increase our returns, I want to hear them. This is my way of testing what I think I know.