“So long” financial advisors, “goodbye” financial services industry and “see you later” Wall Street. A ‘new-breed’ of DIY investor has been empowered, equipped and enabled to leave all three of them in their rearview mirror. This ‘new-breed’, which I refer to as a DIY 2.0 Investor, is being transformed thanks to the Web 2.0.
The new paradigm of DIY investors has chosen to harness the potential of this real time knowledge revolution and its’ instant availability, accessibility, verifiability and deliverability of information to anybody, anywhere, at anytime and to any web capable device. What a powerful transformative resource that is now at our fingertips providing factual and truthful information and all at no cost. Self-empowerment at its best!
A good place to start this discussion is with a brief history lesson.
Investing from the beginning up until the early 90’s changed very little. Being a ‘1.0 Investor’ meant your only choice was to invest via a stock broker that bought and sold individual stocks and or mutual funds on your behalf. In the mid 90’s, the internet provided the catalyst for low-cost brokers to leverage the internet’s ability and begin offering on-line trading for those DIY investors brave enough to take on the challenge. This shifted the control of investing from the stock broker to the DIY investor and these DIY’ers were pioneers as they had to research, analyze, buy and sell on their own. Needless to say, few investors were brave enough to take on this rogue course of action.
By the mid to late 90’s however, the internet and it ability to share information, access websites and stream stock quotes, advanced this rogue group of DIY investors into what we now know as ‘the-crazed-day-traders’. With the technology stocks heating up, analytical tools coming on-line, investors dumping their stock brokers and advisors to brave the DIY waters, their only thoughts were the riches and wealth that awaited them. This period of “irrational exuberance” lasted until the Technology or Dot-Com Bubble burst in 2001-2002…and burst it did, costing trillions in investor losses. These early DIY investors that were overcome with “irrational exuberance” while the markets were going up, unfortunately were rationally humbled when the bottom fell out. Lesson learned and most of these early DIY’ers returned to the comfort of financial advisors.
In 2006-2008, the ‘Housing Bubble’ formed and it too burst with similar results for investors, trillions in investment losses, again. The investor’s professional financial advisors were supposed to have all the answers and protect their client’s assets. Investors found this was not the case as the financial firms of Wall Street were busy serving their own interest by selling highly complex and speculative products to their investors. Another tough lesson learned.
DIY investors and professional financial advisors both failed miserably from 1998 – 2008. These historical events and developments caused a metamorphosis for a ‘new-breed’ of investor. This ‘new-breed’ of investor lifted themselves up, licked their wounds and committed to learn how to play a new game…a winner’s game…transforming themselves into DIY 2.0 Investors!
What are the transformative catalysts that are empowering and inspiring the DIY 2.0 Investor?
- The Web 2.0 Revolution with knowledge being the ‘new currency’.
- People becoming empowered by their smart phones/devices.
- A desire to be in control and make informed decisions.
- The financial services industry continually exposing their total self-serving nature.
- Investors lack of trust and confidence with Wall Street and those that work in it.
Let’s define what characteristics differentiate a DIY 2.0 investor. They’re:
- Well informed.
- Self empowered.
- In complete control.
- Willing to partner with a company that provides blueprints to financial success.
- Committed to learn how to become their own most-trusted financial advisor.
- Ensuring/guaranteeing their money is building wealth for them…and not someone else.
- Utilizing strategies that are academic-based, time-tested and structured on mechanical logic.
- Choosing to invest within their time limitations and lifestyle.
Finally, what are the keys to becoming a successful DIY 2.0 investor?
- Understanding the available choices, and there are only two.
- Making a decision that the choice selected can best meet defined financial goals.
- Commitment to a lifelong journey.
- Partnering with a company offering a personalized blueprint providing fundamental models that can be adapted and adopted over the course of an investor’s investment lifetime.
- Passion for a successful financial future and peace of mind.
Becoming an informed self empowered investor and transforming yourself to a DIY 2.0 Investor is all about choice. A virtue we all own and can exercise. There are no longer any barriers that can’t be overcome. None!
This new paradigm evolving from the Web 2.0 is an intoxicating and empowering movement providing knowledge at the speed of thought. The Web 2.0 is allowing each of us to make informed decisions that we could not have done a decade ago, and it’s all in our hand.
The DIY 2.0 Investor is embracing this real time Web 2.0 Revolution to compete, and competing to win. A recent study by Cogent Research of Gen X Investors demonstrated a dramatic change in fortune. This ‘new-breed’ of Gen X DIY 2.0 investors experienced a 28% return in 2010, while their peers who turned to a professional financial advisor for guidance, reported a mere 3%, during the same time period. Whose game would you rather play?
Let the ‘mass exodus’ begin. “So long” financial advisors, “goodbye” financial services industry and “see you later” Wall Street.