[After investing through a broker for more than seven years, Dave from Winnipeg has decided to become a DIY Investor and offered to write about his investing adventures. Here's part one of his saga...]

After months and months of reading investing focused books, sites and blogs I’ve finally gotten to the point where I feel reasonably ready to jump into DIY investing with both feet, or at the very least test the waters with the tips of my toes (as you can see, my investment mood varies depending on the day)! I suppose I should start with a little background on myself – I’m 29 years old and work for a large insurance company in Canada. I’ve been saving and investing in mutual funds since I was 20.

In my early 20′s, I invested in the mutual funds that my local Credit Union offered. My banker at the time recommended them, but little did I know that she was only authorized to recommend them and no other mutual funds, so I was immediately at a disadvantage. I didn’t have a lot of investing knowledge at the time so I took her recommendation to buy two funds. The funds performed quite abysmally (I don’t know whether that had to do with the market at the time or the funds themselves) and about five years later I transferred my investments to a friend that had just received her license as a financial advisor. She suggested two other funds from large mutual fund dealers in Canada and I signed up without much hesitation. As you can see, although I was actively socking away money in RRSPs, I didn’t take an active role in figuring out where the money was being invested. Generally, whatever was recommended to me was what I bought.

Fast forward to two years ago when I was boarding a plane to Mexico for a quick one-week vacation. I’ve always been interested in investing and I picked up a book called The Automatic Millionaire, by David Bach at the airport bookstore. I got so into the book that I read it cover to cover by the time the plane landed in Mexico, much to the chagrin of my girlfriend. That was the catalyst for my new outlook on investing. I started reading a few more investing books and came across The Boglehead’s Guide to Investing by Larimore, Lindauer and LeBeouf. It was through this book that I came to discover how important low management fees are to future earnings and the importance of diversification through broad index funds and/or ETFs. The first thing I did was look at the MER for the two mutual funds I held at the time and, after picking my tongue off the ground, decided I was going to take a more active role in investing. It was my plan to start investing in low cost ETFs and that I didn’t want to deal with my current financial advisor nor my banker at the Credit Union, with whom I still dealt with for my banking.

I also decided that I wanted to handle my own investing online using a discount brokerage firm so I starting looking at my options: My current online brokerage account (I had purchased Air Canada stock about 6 months before bankruptcy, but that story is for another time) was an option, but they charged $29/trade and an annual RRSP account fee ($50/year). After a bit more research, I discovered a few of the smaller Canadian discount brokers, including TradeFreedom, Questrade, and Interactive Brokers. I eventually settled on TradeFreedom, mainly because they offered no fees on RRSP accounts (most of my investment holdings were in RRSP accounts), low fees, and they had JUST been purchased by Scotiabank (that gave me warm fuzzies).

My decision to transfer all my investments away from my financial advisor/friend was very easy. I knew I could handle my own investing decisions as long as I had some good knowledge and kept it reasonably simple. Over the last six months or so I’ve gained invaluable knowledge and continue to develop my investing strategy. It’s been a bit challenging lately trying to figure out the best time to get into the market, especially with things being so volatile lately, but I’ve purchased a handful of ETFs and am slowly starting to narrow down the rest of my asset allocation. As of right now, the majority of my holdings are in cash. I know this market presents great opportunities for purchases and I feel fully confident that I’ll make the right decisions in the next few weeks and/or months.

My comment: Thank you for an excellent post Dave. My only suggestion would be to devise an asset allocation that is suitable for your circumstances and tastes and stick to it. While MERs take a huge toll on investment returns, DIY investors need to guard against the tendency to trade too much or chase performance. Good luck with your adventures. If you have a story idea or tips or suggestions, feel free to contact us.