Should I manage my share portfolio?

After 20 years of working full time, I now have more time available to pay attention to my investments. Will my share portfolio benefit if I take a more active, hands-on approach?

Name withheld Schalk Louw, a financial adviser from PSG Wealth Old Oak, responds: It’s hard to say without knowing more about your experience and trading knowledge. In general, investors often disagree about the best strategy to follow when buying and selling shares.

“Telescope investors” look at the investment landscape with a long lens. They buy shares and see them as good long-term investments. They don’t monitor the market on a day-to-day basis, and they invest in shares that should increase in value over longer periods, usually five to 10 years.

“Microscope investors” prefer to look at daily details. They believe that trading very actively holds the key to good returns. Shares are bought with the intention of generating quick returns, and this type of investor’s main goal is to outperform the market over the long term.

Microscope investors need to know what they are doing, though. This strategy needs commitment and hard work. In my experience, only a small number of people – usually financial professionals – can pull this off.

The thing to be careful of is having a telescope strategy with a microscope mindset. If you are a long-term investor, it is important not to panic about daily market fluctuations.