DIY Vs. Automated Investing: Who Should Actually Be Doing The Work?

If you’re deciding between DIY or automated investing, it comes down to who does the work. Someone has to open the account, choose the funds, move money in on a schedule, and correct the mix when it drifts. That someone can be you or it can be automated. 

Here's what managing your own portfolio can ask of you, what automation takes off your plate, which option costs less, and what research says about it all.

Strategy vs. execution: the two questions people mix up

When it comes to strategy, here’s two ways to see it:

• Passive investing is a buy-and-hold approach

• Active investing is proactive, with frequent buys & sells to attempt to achieve quicker profits

When it comes to execution, this is where you can choose between DIY or automated investing. You can mix and match your strategy and execution:

There is no “right” combination. It’s more finding the strategy and execution that best fits you. Many people also don’t stick to one combination. Many may take a passive strategy and automated execution for one account but are more hands-on with another.

The words blur because "passive" sounds like "hands-off," and hands-off sounds like someone else is handling it. But passive describes how a portfolio behaves, not how much work its owner does.

What DIY investing involves

DIY investing is a real job, but a small one. Most of the work is front-loaded, and what's left are a handful of decisions spread across the year.

Here's a task list, with roughly how often each item comes up:

• Set your asset allocation once at the start, which is the split of your money across stocks, bonds, and cash, then revisit it every few years or when you have a life event

• Choose the specific funds and check each one's expense ratio, the annual percentage a fund charges to run itself, which is mostly a one-time job with an occasional look afterward

• Open the account

• Move money in and place trades on a regular basis, because cash that lands in the account isn't invested until you buy something with it

• Rebalance once or twice a year if your mix drifts, so your portfolio stays close to your desired asset allocation

• Reinvest dividends as they arrive, which is quarterly for most funds

• Review the cost basis your brokerage reports on the tax forms it sends each year, and keep your own records for anything those forms don’t cover, such as older holdings or shares transferred in from another firm.

It may sound like a lot but when spread out over a year, someone can run a two-fund or three-fund portfolio for decades and do it well. The setup usually takes the longest, but once you have it all figured out, it’ll only take an hour or so each year to check in and make any adjustments.

Investing on autopilot: what automation handles

With automated investing, you typically answer some questions about your goals, timeline, and how comfortable you are with market movement (market risk). Then, the platform builds a diversified portfolio, invests your deposits into it, and keeps the mix near its target as prices move. Your main job is funding it.

How much a platform automates can vary quite a bit, which is mapped out in our article on which platforms automate which parts of investing.

One thing worth knowing is that providers of automated advice are generally registered investment advisers, which means they owe their customers a fiduciary duty. The SEC's investor bulletin on robo-advisers is a short, plain-language read on what to expect and what to ask.

Another thing worth remembering is that automation isn't a strategy. A managed investment account can hold a plain index portfolio or something considerably more active, because what's being automated is the work rather than the philosophy. If the term itself is new to you, we explain what a robo-advisor is elsewhere.

Is DIY investing cheaper?

Yes, managing your own investments is almost always cheaper in fees, and the margin is widest at smaller balances.

A self-managed portfolio of broad index ETFs carries the funds' expense ratios and nothing else. In 2025, the asset-weighted average expense ratio was 0.14% for index equity ETFs and 0.09% for index bond ETFs, according to the Investment Company Institute. Run that at a representative balance: on $10,000, an index ETF portfolio at 0.14% costs roughly $14 a year in total. There's no advisory charge on top of it, because there's no advisor.

Compare that to one of our managed alternatives, Acorns Bronze, which is $4/month, or $48 a year. On a $10,000 balance that works out to about 0.48%. Percentage-based providers price differently, but the principle is the same: you're paying something for management, and doing it yourself means you're not.

If price is the only thing you're weighing, DIY wins, and it wins by a wider margin the smaller your balance. How the gap moves as a balance increases depends on whether a provider charges a flat rate or a percentage, and we've worked through how a flat subscription compares by balance separately.

What research says about automation and follow-through

The case for automation isn't that it earns more. It's that it changes whether the plan happens at all.

In its 2026 How America Saves report, Vanguard found that employees who were automatically enrolled participated at a rate of 94% in 2025, compared with 64% among employees who had to sign themselves up. The plans and the investment options were the same in both groups. What differed was whether taking part was the default or a decision somebody had to make and then remember to act on.

The second piece is about what happens after people start. Morningstar's 2026 Mind the Gap study estimates that the average dollar invested in U.S. mutual funds and exchange-traded funds earned 8.7% a year over 10 years, while the funds themselves returned 9.9% a year over the same period. 

That 1.2 percentage point difference, roughly 12% of the funds' total return, comes from the timing and size of investors' own purchases and sales rather than from how the funds performed. Morningstar notes that the gap isn't purely a story about panic selling, since routine things like buying on payday contribute too.

Neither finding says that automated investing produces better returns. It doesn't, and nothing above should be read that way. Investing involves risk, including possible loss of principal, and no amount of automation or diversification ensures a profit or protects against loss in a declining market. 

Should you manage your own investments or automate them?

There's no universal answer here, and there are benefits to both.

Doing it yourself tends to be the better call if

• You find that picking and choosing your assets is more interesting than tedious

• You already have a system you actually follow

• Your balance is large enough that the cost difference is real money, or;

• You want holdings that a managed portfolio won't give you

Someone with $75,000, a standing monthly transfer, and a genuine interest in the mechanics can run a two-fund portfolio for well under $50 a year.

Automation tends to be the better call if

• You've started and stopped before

• Your income is irregular enough that deciding how much to invest each month is the thing that stalls you

• You'd rather the maintenance simply happened, or;

• You know yourself well enough to suspect you'd sell at the wrong moment

A useful exercise is to describe yourself accurately rather than aspirationally. A self-managed portfolio that goes untouched for three years isn't a cheaper portfolio. It's a portfolio nobody is looking after, and the contributions that never got made can cost more than any expense ratio.

If you land on the automated side, the next question is which platform, and we've written about how to choose between automated investing apps separately.

Can you automate parts of it and manage the rest?

The good news is you don't have to pick a side! Plenty of people run an automated account for long-term growth potential and keep a separate, self-directed account for the holdings they want to choose themselves. The automated side handles consistency. The self-directed side handles curiosity. Neither one has to be the whole plan.

The split also doesn't need to be even. You can automate the bulk of it and keep a smaller slice for hands-on positions, which keeps the core of your portfolio on schedule while leaving room to make your own calls.

Acorns sit on the automated side of an arrangement like that. Round-Ups® invest your spare change from everyday purchases, Recurring Investments move money in on a schedule you set, and it all goes into an expert-built, diversified portfolio that gets rebalanced for you, for a flat monthly subscription starting at $4/month with Acorns Bronze.

Whichever way you go, the variable that matters most is how much goes in and how often, not who presses the button. If that's the part you haven't settled yet, our guide to how much of your paycheck to save each month is a good next stop. And when you're ready to put the execution on autopilot, you can start investing with Acorns.

Frequently asked questions

Is DIY investing the same thing as passive investing?

No, they aren't the same thing. Passive describes what you own, usually broad index funds held for the long term. DIY describes who does the work of owning it. You can hold an entirely index-based portfolio and still place every trade yourself, and you can automate a portfolio that isn't index-based at all.

How much time does managing your own portfolio take?

It takes less time than most people expect, and the work is front-loaded. Setting an allocation, choosing funds, and opening an account can take a few hours but is only done once. After that, the ongoing work is placing regular contributions, rebalancing once or twice a year, and handling dividends and cost basis, which is realistically an hour or two annually.

Is it cheaper to manage my own investments?

Usually it is. A self-managed portfolio of broad index ETFs carries only the funds' expense ratios, which averaged 0.14% for index equity ETFs in 2025, and no advisory charge. Managed options add either a percentage of your balance or a flat monthly subscription on top of those same underlying fund costs.

Does automating my investing mean giving up control?

You give up the trade-by-trade decisions, not the account. You still choose your risk level, how much goes in, how often it goes in, and when to stop. What changes is who executes the allocation and the rebalancing. Some platforms also let you add individual holdings alongside the managed portfolio.

How should I split money between an automated and a self-directed account?

There's no fixed rule, but a common approach is to automate long-term contributions and keep a smaller portion in a self-directed account for holdings you want to choose yourself. Whatever ratio you settle on, consider looking at your overall mix across both accounts rather than at each one in isolation.

Can I switch from automated investing to doing it myself later?

Yes, you can move to managing it yourself whenever you want, because starting with an automated account doesn't lock you in. You can change how much you contribute, move money, or transfer holdings to another provider, though transfers can involve paperwork, possible transfer charges, and tax consequences in a taxable account. Read the terms before you move anything.