Is managing your portfolio a hassle you could do without? If so, this may be interesting…

Managing your own portfolio can be a tedious and time-consuming task. This can be the case even if you have years of investing experience under your belt.

With thousands upon thousands of funds and financial instruments to choose from, it’s not always easy to keep tabs on the market and figure out what to do next.

Many of the clients we speak to have built up a substantial pot of money and wish to keep growing it. However, they may not have enough time to do it justice. Or they may be worried that one or two bad decisions could set their efforts back by years.

Some inevitably kick the decision into the long grass and stick with the same old investments. But this rarely solves their problems. And for every year that passes it can get harder to hit their long-term investment or retirement goals.

Meanwhile, financial advisers are a popular option that can help to take some of the hassle out of investing. A good adviser is valuable. However, they come with their own set of dilemmas.

As we’ve written about at length, if you’re not careful advisory fees can eat into your portfolio returns – and they might even leave you worse off (see this article for details). In short, you need to be sure the advice you’re getting is good long-term value for money.

In one recent industry survey, only 51% of financial advisory clients reported a "high" level of satisfaction with the services they were receiving.

For those who baulk at advisory fees, DIY investing may be a tempting alternative.

However, trying to keep on top of everything can be a hassle. Clients have told us that at times they feel like they’re suffering from ‘information overload’.

That’s understandable.

After all, financial markets are noisy and often confusing places. There’s an entire industry dedicated to getting investors to move their money around and seek out better returns. This includes financial news sites, fund pick lists, trading platforms and so on.

Faced with the constant temptation to do something, it’s no wonder DIY investors often buy and sell more than they need to, racking up transaction fees.

Our investments team studied this issue and found that frequent trading – in other words, trying to time the market – makes investors materially worse off in the long run.

This is why the most successful investors have a system of rules that stay in place, regardless of what’s happening in the economy or wider financial markets.

We use a similar process at Wealth Club when managing the Wealth Club Portfolios. People are surprised to hear that performance is the last thing we look at when evaluating a fund. Once we’ve entered a position, we don’t spend time watching daily price movements. This helps us to keep trading to an absolute minimum.

As it happens, we usually only exit a position if we believe the fund manager in question has lost discipline or changed strategy unexpectedly.