The illusion of self-managed investing in a volatile world
10th April 2026
Periods of market volatility tend to expose the difference between having investments and having a plan.
In recent months, markets have been influenced by shifting interest rate expectations, ongoing geopolitical tensions, and persistent inflation uncertainty. None of this is unusual. What is notable, however, is how many investors are still approaching their portfolios as if none of this requires structure.
Among expats in particular, there is a growing trend of “self-managed” investing. On the surface, this appears sensible. Lower costs, direct control, and access to global markets have never been easier. The reality, however, is often very different.
What looks like control is frequently a lack of framework.
In recent months, markets have been influenced by shifting interest rate expectations, ongoing geopolitical tensions, and persistent inflation uncertainty. None of this is unusual. What is notable, however, is how many investors are still approaching their portfolios as if none of this requires structure.
Among expats in particular, there is a growing trend of “self-managed” investing. On the surface, this appears sensible. Lower costs, direct control, and access to global markets have never been easier. The reality, however, is often very different.
What looks like control is frequently a lack of framework.
The data behind investor behaviour
There is a consistent body of evidence showing that individual investors struggle to match the returns of the markets they invest in.
Research from DALBAR, which has tracked investor behaviour for decades, shows that the average equity investor underperforms the broader market significantly over time. Their most recent long-term studies suggest that this gap is not marginal. It is often several percentage points per year.
Similarly, analysis from Morningstar highlights the concept of “investor returns” versus “fund returns”. The difference is driven by timing decisions. Investors tend to add money after periods of strong performance and withdraw after declines, reducing their actual realised returns compared to the funds themselves.
This is not a knowledge problem. It is a behavioural one.
Markets reward discipline, not activity.
The structure problem
When we review portfolios described as “self-managed”, a number of patterns tend to emerge.
There is often a concentration in familiar names or sectors, particularly US technology. Diversification is assumed rather than constructed. Asset allocation is rarely defined beyond broad intentions.
Cash holdings are inconsistent, sometimes excessive, sometimes non-existent. There is no clear rebalancing process. Gains are allowed to run without discipline, while underperforming positions are either ignored or sold at the worst possible time.
Most importantly, there is usually no link between the portfolio and any defined financial objective.
This is the key issue.
A collection of investments is not a financial plan.
There is a consistent body of evidence showing that individual investors struggle to match the returns of the markets they invest in.
Research from DALBAR, which has tracked investor behaviour for decades, shows that the average equity investor underperforms the broader market significantly over time. Their most recent long-term studies suggest that this gap is not marginal. It is often several percentage points per year.
Similarly, analysis from Morningstar highlights the concept of “investor returns” versus “fund returns”. The difference is driven by timing decisions. Investors tend to add money after periods of strong performance and withdraw after declines, reducing their actual realised returns compared to the funds themselves.
This is not a knowledge problem. It is a behavioural one.
Markets reward discipline, not activity.
The structure problem
When we review portfolios described as “self-managed”, a number of patterns tend to emerge.
There is often a concentration in familiar names or sectors, particularly US technology. Diversification is assumed rather than constructed. Asset allocation is rarely defined beyond broad intentions.
Cash holdings are inconsistent, sometimes excessive, sometimes non-existent. There is no clear rebalancing process. Gains are allowed to run without discipline, while underperforming positions are either ignored or sold at the worst possible time.
Most importantly, there is usually no link between the portfolio and any defined financial objective.
This is the key issue.
A collection of investments is not a financial plan.
Volatility is not the problem
Short-term market movements are often cited as the reason for poor outcomes. In reality, volatility is a constant feature of markets, not an exception.
Global equities have experienced regular drawdowns of 10 to 20 percent throughout history. More severe corrections occur less frequently but are entirely normal within long-term return patterns.
Despite this, long-term data remains clear. Broad global equity markets have delivered strong positive returns over extended periods, with compounding doing the majority of the work.
The issue is not that markets are unpredictable in the short term. It is that investors attempt to react to that unpredictability.
This is where most of the damage occurs.
The expat dimension
For expats, the risks of self-managed investing are amplified.
Currency exposure is often overlooked. A portfolio denominated in USD may look strong on paper, but the real outcome depends on future spending currency. Without deliberate management, currency becomes an uncontrolled risk factor.
Tax treatment is another area frequently misunderstood. Investments held in the wrong structures can create unnecessary liabilities, particularly when moving between jurisdictions.
Access to products is broader internationally, but so is the variation in quality. Without a clear framework, it is easy to accumulate a mixture of holdings that do not work together.
In many cases, what appears to be a diversified portfolio is simply a collection of unrelated positions.
The role of discipline
Effective investing is not about predicting markets or selecting the next outperforming asset.
It is about constructing a portfolio that is aligned with a defined objective and maintaining that structure over time.
This includes setting an appropriate asset allocation, ensuring genuine diversification across regions and asset classes, and rebalancing regularly to control risk.
It also requires an understanding of sequencing risk, particularly for those approaching or in retirement. A poorly timed market decline, combined with withdrawals, can have a lasting impact on a portfolio’s sustainability.
These are not considerations that can be addressed reactively.
They require planning.
Short-term market movements are often cited as the reason for poor outcomes. In reality, volatility is a constant feature of markets, not an exception.
Global equities have experienced regular drawdowns of 10 to 20 percent throughout history. More severe corrections occur less frequently but are entirely normal within long-term return patterns.
Despite this, long-term data remains clear. Broad global equity markets have delivered strong positive returns over extended periods, with compounding doing the majority of the work.
The issue is not that markets are unpredictable in the short term. It is that investors attempt to react to that unpredictability.
This is where most of the damage occurs.
The expat dimension
For expats, the risks of self-managed investing are amplified.
Currency exposure is often overlooked. A portfolio denominated in USD may look strong on paper, but the real outcome depends on future spending currency. Without deliberate management, currency becomes an uncontrolled risk factor.
Tax treatment is another area frequently misunderstood. Investments held in the wrong structures can create unnecessary liabilities, particularly when moving between jurisdictions.
Access to products is broader internationally, but so is the variation in quality. Without a clear framework, it is easy to accumulate a mixture of holdings that do not work together.
In many cases, what appears to be a diversified portfolio is simply a collection of unrelated positions.
The role of discipline
Effective investing is not about predicting markets or selecting the next outperforming asset.
It is about constructing a portfolio that is aligned with a defined objective and maintaining that structure over time.
This includes setting an appropriate asset allocation, ensuring genuine diversification across regions and asset classes, and rebalancing regularly to control risk.
It also requires an understanding of sequencing risk, particularly for those approaching or in retirement. A poorly timed market decline, combined with withdrawals, can have a lasting impact on a portfolio’s sustainability.
These are not considerations that can be addressed reactively.
They require planning.
Why this matters now
The current environment is a useful reminder of these principles.
Geopolitical events will continue to emerge. Interest rates will continue to shift. Markets will continue to respond in ways that feel unpredictable in the moment.
None of this changes the underlying reality.
Long-term outcomes are driven by structure, discipline, and consistency.
Investors who rely on instinct, headlines, or short-term narratives will continue to experience inconsistent results. Those who operate within a defined framework are far more likely to achieve their objectives.
Final thoughts
Self-managed investing is not inherently flawed. With the right knowledge, discipline, and structure, it can be effective.
The issue is that most investors are not operating in that way, but all tend to think that they are.
The gap between perceived control and actual outcomes is significant, and the data reflects this clearly.
In a volatile world, the advantage does not come from reacting faster. It comes from needing to react less.
At Brigantia, our focus remains unchanged. Build a plan, structure portfolios correctly, and allow time and discipline to do the heavy lifting.
Everything else is noise.
The current environment is a useful reminder of these principles.
Geopolitical events will continue to emerge. Interest rates will continue to shift. Markets will continue to respond in ways that feel unpredictable in the moment.
None of this changes the underlying reality.
Long-term outcomes are driven by structure, discipline, and consistency.
Investors who rely on instinct, headlines, or short-term narratives will continue to experience inconsistent results. Those who operate within a defined framework are far more likely to achieve their objectives.
Final thoughts
Self-managed investing is not inherently flawed. With the right knowledge, discipline, and structure, it can be effective.
The issue is that most investors are not operating in that way, but all tend to think that they are.
The gap between perceived control and actual outcomes is significant, and the data reflects this clearly.
In a volatile world, the advantage does not come from reacting faster. It comes from needing to react less.
At Brigantia, our focus remains unchanged. Build a plan, structure portfolios correctly, and allow time and discipline to do the heavy lifting.
Everything else is noise.
