PMS vs DIY Stock Investing: Why Process Beats Impulse

Every HNWI has a story of a great stock pick and a painful loss. The difference is not genius—it’s process.

PMS Advantages
• Dedicated research teams and quantitative screening.
• Rule-based entry/exit and risk controls.
• Continuous rebalancing to preserve style purity.
• Full audit trail and tax records.

DIY Limitations
Without institutional processes, investors tend to over-trade, ignore sector caps, and exit winners too early. Behavioural biases like anchoring and loss aversion destroy compounded returns.

Example
A PMS may cut a loss-making stock at −15 % per risk rule; a DIY investor often “averages down” until −50 %. Systems beat sentiment.

Key Takeaway: Wealth is built on rules, not impulse; PMS institutionalizes those rules.

Disclaimer: Educational only.