This Day On The Street
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Do You Have The Skills to Manage Your Money?

"Professional managers have teams of people with degrees spending 18 hours a day researching this stuff," says Daniel D'Ordine, a financial planner for New York-based Life and Wealth Planning. "Studies show that about two-thirds of all active managers don't beat their respective indices."

If you're considering a do-it-yourself approach, D'Ordine suggests starting with a small amount of savings, maybe $10,000 or so. That will allow you to see whether you're motivated enough to manage the account every day without risking your entire nest egg.

Many discount brokerages offer tiered services that allow customers to decide how involved they want to be with their accounts. The companies can provide investment research and expert advice, for example.

"We can be as involved or as uninvolved as a client wants us to be," Lebouef says. "We can sit down and go through an assessment process and make recommendations, or we can let clients do their own due diligence."

Even with all of the information provided by the online brokerages, the final buying decision rests on your shoulders. And saving a little money with a rock-bottom commission won't be worth it if you end up hurting your investment because you took on more than you could handle.

"People might trick themselves into thinking that managing their own investments is cheaper," says D'Ordine. "But a lot of times they end up missing out on opportunities that cost them even more in the long run."
Peter McDougall is a freelance writer who lives in Freeport, Maine, with his wife and their dog.
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