Investing, in principle, is about one thing: putting your money to work efficiently so that it compounds into greater wealth over time. As an investor, you can adopt two broad strategies: one is to select and manage individual stocks independently, the other is to delegate the job to professional fund managers through vehicles like mutual funds.
The attraction of managing your own portfolio is obvious. You save the management fee and retain complete control over your investments. However, this calculation does not account for the fact that professional investment management is not merely about picking stocks. It involves research, portfolio construction, risk management, execution and, importantly, behavioural discipline.
