Can One Invest in Stocks & Bonds on One's Own?

It is very possible to invest in stocks and bonds on your own, and getting started is not very difficult. The challenges to do-it-yourself investing lie in developing a plan and determining which stocks and/or bonds are the ones to buy to meet your investment goals. Successful investing on your own can be very rewarding, but a lot of work is involved to reach financial security with your investments.

Investing Online

The ability of buying stocks and bonds through an online discount brokerage account has made it possible for anyone to skip the use of a financial adviser. You can choose investments and buy stocks and bond with a few clicks of a computer mouse. Online brokerages offer a wide range of investment choices, and many provide research tools to help you find stocks or bonds appropriate for your investment goals. Other ways to invest on your own include direct stock purchase plans offered by individual companies, and the TreasuryDirect.gov website where you can set up an account to buy U.S. Treasury bonds directly.

Getting Started

The U.S. Securities and Exchange Commission sponsors Investor.gov, a website for new investors. The site is designed to provide the basic information you need to learn before starting to invest, either on your own or using an investment adviser. Investor.gov provides calculators, quizzes and worksheets that can be used to develop your basic investment plan. The website also explains how the stock and bond markets function. The quizzes tell you whether you have enough knowledge to start investing, or that you need to study some more before committing your money to the markets.

Doing Your Research

Successful investing on your own requires a large amount of research. A lot of investment information is available online and from financial publications. Your challenge will be to decide what information is applicable to your investment goals and plans. Besides just picking stocks and bonds, it is important to have a plan for asset allocation and to understand the potential of an investment against how much risk you are willing to assume, the SEC website points out.

DYI Pitfalls

Saving your money and investing in stocks and bonds can lead to financial security as your investment portfolio grows. However, many investors lose money in the markets. Steering clear of some basic mistakes can help you avoid losses. Potential mistakes include not taking enough time to do your research before investing, not paying attention to what is happening with your investments, and focusing too much on a small sector of the market. To avoid being sucked in by claims of easy profits and guaranteed returns, review Investor.gov's signs of fraud and hard-sell techniques.