Professional advice still critical for DIY investors
Do it yourself (DIY) investors will be making a mistake if they choose to believe that they do not need help from financial advisers, and instead pursue strategies via the internet.
That is the assessment of Middletons Securities spokesman, Nick Loxton who has likened the use of the internet by DIY investors to people seeking to use the net to self-diagnose medical complaints.
He said that novice investors could lose their entire life savings by putting their trust into an unknown source online in their pursuit of a quick return or a lesser known investment option.
"The adage that too much knowledge can be a dangerous thing rings true when it comes to DIY investors who make decisions based on online recommendations and information, and yet the industry is starting to see a growing number of investors facing financial ruin by going down that very path," Loxton said.
He said that in circumstances where online tools and information were becoming increasingly easy to access and use, there was a risk that DIY investors were being lulled into the false belief that there was no place for expert financial advice.
"This is not like spending time online to find that perfect holiday destination, only to discover it has no running water and backs onto a garbage dump when they arrive." Loxton said.
"The risk is far, far greater for DIY investors because a wrong decision can ruin their financial futures — and we already know that people are pre-disposed at badly investing their earnings because they are driven by emotion rather than logic."
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