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Do it yourself investing

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Do it yourself investing


Investing in the stock market is one of the most profitable steps you can undertake in your journey of becoming financially secure. The stock market has constantly given over 15% returns annually to those who invested in growth stocks with high potential. However, one thing that confuses investors is the management of their portfolios.

Managing a portfolio means that you monitor your stocks regularly, perform technical and fundamental analysis, cut your stake at an ideal time, or accumulate when necessary. These factors are vital in maintaining positive portfolio growth. In a case like this, you must know when to book profits and whether to accumulate the stock again at the dip. There are two ways for maintaining your portfolio: hire a portfolio manager or do it yourself.

This blog details a method used by a majority of retail investors to manage their portfolios called DIY investing or Do It Yourself investing.

What is DIY?

DIY or do it yourself is a common term defined for using your knowledge, experience, beliefs, skills, opinions, etc., to do something as per your predetermined goals. DIY aims to avoid any professional help, commit mistakes if they happen and learn from the mistakes to become a professional in something you are passionate about.

DIY processes suggest that people can either seek professional help or can do it themselves. However, seeking professional help will not allow them to learn how to do it, and they will always rely on professionals. On the other hand, if you learn to do it yourself, you are better equipped to make informed decisions that affect your personal life.

What is DIY investing?

DIY investing or do-it-yourself investing is a process through which individual and retail investors look to expand and manage their financial portfolios themselves. Also known as self-directed investing, DIY investing allows investors to consider their own opinions and beliefs while choosing which securities to buy, when, for how long, and from where.

In DIY investing, individual and retail investors do not seek professional help from financial advisors or portfolio managers to manage their portfolios. DIY investing contributes to the transition of investors to become professional investors over time by making their own decisions and learning from their financial results. Furthermore, DIY investing is important as it puts them in charge of their finances and is answerable if there are losses.

How does DIY investing work?

When investors consider investing in the financial markets for the first time, they have to make numerous choices. These choices can be:

  • Reviewing the personal finances to understand the available amount for investment.

  • Finding an ideal stock broker to open a Demat and trading account.

  • Deciding on which asset class to start with: stocks, derivatives, currencies, bonds, etc.

  • Researching the asset in detail before deciding the ideal entry point.

  • Deciding the time horizon for holding the assets and an ideal exit point.

These choices can seem hard for an investor if they don’t have the time and the resources. However, they only have two, do it themselves or hire a portfolio manager. The former is relatively cheaper than the latter. Hence, investors include DIY investing in their investing journey and hope to manage their portfolios themselves. But how does that work?

DIY investing works through the following services and tools:

  • Discount Brokers: Discount stockbrokers such as IIFL are one of the most affordable services available in the stock market. Discount brokers are stockbrokers that charge a flat rate ranging between Rs 10-Rs 20. They offer a virtual platform that makes it relatively easy for investors to buy and sell shares, along with various technical charts and reports.

  • Financial Literacy: DIY investing for beginners requires investors to choose stocks and their entry and exit point themselves, which is impossible without extensive financial knowledge. Hence, DIY investors look towards the best DIY investing sites that can allow them to learn about the various aspects of investing. Furthermore, these sites can also inform about the company financials and potential trends the stock can follow soon.

  • Historical and current performance: Company data, historical and current, is the key to DIY investing. Beginner investors require that you go through the company’s historical financial data for executing technical analysis and the current financial data for executing fundamental analysis.

Pros and Cons of DIY investment
No stock market technique is without its pros and cons. The same is the case with DIY investing. As DIY investing for beginners is the first step towards becoming a professional investor, it can result in numerous financial mistakes if not done carefully. However, as investors are their bosses, DIY investing can benefit them through many factors.

Here are the pros and cons of DIY investing:


  • Low Cost: DIY investing allows investors to cut down on the cost of hiring portfolio managers. As they are their portfolio managers, the transactions in their Demat accounts happen free of cost. The only cost they have to incur is the flat rate charged by the stockbrokers, which is relatively very less and affordable.

  • Goal-based investing: You can not ask your portfolio manager to invest because you want to buy a car after three years. Goal-based investing is only possible when you review your finances and invest according to your personal goals. Here, DIY investing helps as you take all the investing decisions.

  • Personal Considerations: Through DIY investing, you can consider your personal beliefs and opinions and choose stocks that you think would be ideal for achieving your short-term or long-term goals. You do not have to worry about consolidations as you know how the prices can affect you at a personal level.

  • Valuable learning: The long-term idea behind DIY investing is to infuse experience in beginner investors as they make their financial decisions and witness the results. In this way, they learn to invest and become a professional investor over time.


  • Complex process: The process of DIY investing is a complex process from start to finish that requires a high level of patience and discipline. You can not hope to do everything successfully as a beginner. It may result in high losses if you are not cautious enough.

  • Adaptive goals: DIY investing for beginners always lacks the professional guidance required to manage the highly volatile market. As beginners are not experienced enough to know when to buy and sell, investing goals may be interrupted by a bear market.

  • Excessive securities: The financial market is full of various asset classes that may all seem investment-worthy to someone looking to make profits but is without extensive financial knowledge. This can result in over-investing and ultimately undermine the portfolio’s health.

  • Early quitting: No one likes constant losses, and when beginners execute DIY investing, there is a high chance of incurring losses as it is the initial stage of learning and managing the portfolio. After making losses, numerous investors quit the investing spectrum, thinking that it is not for them and can result in further losses.

DIY investing is simple and cost-effective but not necessarily always successful. Before going forward with DIY investing for beginners, you must do extensive research on what you must know before investing and what services and tools you would require for successfully executing DIY investing. If you are looking for the best DIY investing platform, you can end your search at IIFL. It is one of the most affordable discount brokers that allows you to open a Demat and trading account for free. All you have to do is visit the IIFL website or download the IIFL Markets app from the app store.


Q.1: Is DIY investing well?

Yes, DIY investing is followed by a majority of individual and retail investors and can prove to be a cost-effective method for managing your portfolio. However, it is advisable that you garner financial knowledge and only invest after doing extensive due diligence.

Q.2: Can you invest by yourself?

Yes, DIY investing allows you to invest by yourself. However, you will need a Demat and trading account before you start investing.

Q.3: What are DIY investment tools?

DIY investments tools are products and services that you can use to make informed investment decisions and manage your portfolio effectively.

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