Stocks: Advice for the DIY millionaire investor

Dear Dr. Don,
I have about $1 million in about 14 stocks. I own, watch and reinvest all the dividends. However, I recently spoke with an investment professional who works at a bank, and he wants to manage these stocks for me -- at no charge. Should I let him?

Thanks,
-- Barry Baffling

Dear Barry,
You don't need to do this. I'm not sure what the investment professional's angle is in offering to do this for free. I'd argue against taking him up on that offer without knowing what's in it for him and how it benefits you.

There's a lot you can do on your own to keep that portfolio in good shape.

For example, a DIY investor could use a portfolio analytics package to make sure it's solidly diversified. A free two-week trial on Morningstar would give you access to its Portfolio X-Ray feature that could help you with this. Your stockbroker should have that type of package available, too.

I also suggest you pay close attention to changing tax laws regarding dividend income and capital gains. It might influence your after-tax investment earnings. The taxation of qualified dividend income is scheduled to jump to your ordinary income tax rate from the current maximum of 15 percent. And your marginal income tax rate could go higher if the Bush tax cuts aren't extended.

The tax rate on long-term capital gains also is scheduled to increase from the current 15 percent maximum, depending on your modified adjusted gross income, to 20 percent. This doesn't include the additional 3.8 percent Medicare tax for high-income earners ($200,000 for single filers and $250,000 for married joint filers) on certain investment income.

I wouldn't let tax changes dictate how you invest. But it's smart to keep an eye on what the government does this year concerning taxes.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

Ask the adviser

To ask a question of Dr. Don, go to the "Ask the Experts" page and select one of these topics: "Financing a home," "Saving & Investing" or "Money." Read more Dr. Don columns for additional personal finance advice.

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.



More From Bankrate.com
Loading...
 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.2527-0.0002-0.01%
    USDSGD=X
    1.73060.000.00%
    EURSGD=X
    2.1024-0.0016-0.08%
    GBPSGD=X
    81.7557+0.023+0.03%
    SGDJPY=X
    6.1904+0.0009+0.02%
    SGDHKD=X
    2.5847+0.0002+0.01%
    SGDMYR=X
    9,115.9453-35.2734-0.39%
    SGDIDR=X
    4.9687+0.0045+0.09%
    SGDCNY=X
    1.1687+0.0002+0.02%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,294.60-8.90-0.68%
    GCM14.CMX
    19.67+0.01+0.05%
    SIN14.CMX
    90.18-0.65-0.72%
    ^XAU
    3.04+0.02+0.51%
    HGK14.CMX
    104.59+0.83+0.80%
    CLK14.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.73+0.08
    ^FVX
    2.72+0.08
    ^TNX
    3.52+0.06
    ^TYX

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.115-0.002-1.71%
    B22.SI
    0.48+0.020+4.35%
    5GJ.SI
    2.27+0.090+4.13%
    5ME.SI
    2.190.0000.00%
    JS8.SI
    0.61+0.005+0.83%
    E5H.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.162+0.034+26.56%
    5GF.SI
    0.20+0.034+20.48%
    5WD.SI
    0.59+0.050+9.26%
    L5I.SI
    0.28+0.020+7.69%
    C33.SI
    0.215+0.015+7.50%
    5UE.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.103-0.010-8.85%
    5OS.SI
    0.112-0.008-6.67%
    5RC.SI
    0.355-0.025-6.58%
    KJ9.SI
    0.215-0.015-6.52%
    F9M.SI
    0.29-0.020-6.45%
    5PC.SI