We recently shared a blog with 15 of the biggest investing mistakes that consumers keep making, over and over again.
You may have even gone through that list and found that you were making a common mistake when it comes to your investments.
You’re not alone.
In fact, 37% of Americans surveyed admitted to making “impulsive” investment decisions that they come to regret, according to Money Magazine.
Over my career as a financial advisor, I’ve seen a bevy of investment mistakes. So, today I wanted to bring you even more investment missteps to be avoided.
This is a hotly debated topic, but many financial advisors and professionals urge you not to consider your personal residence as an investment. That doesn’t mean you should rent instead of buying, of course, but trying to treat your home as a chief investment may not always be a wise tactic.
Spreading your hard-earned investment dollars over a variety of equities, funds, and even sectors is an important facet of any prudent strategy. Essentially, diversification reduces risk, allowing you to absorb the shocks and pitfalls of negative market movement without being wiped out. Remember that, according to Warren Buffett, the first rule of investing is not to lose money, and the second rule is to refer to rule number one! And diversification may help you reduce risk.
Get-rich-quick schemes and high-risk bets usually turn into get-poor-quick schemes. Patience is the secret sauce to successful investing because with patience comes time, allowing compounding to really gain momentum in your favor. Likewise, patience means you won’t get too high or low, which brings us to the next point…
Too often, consumers (as well as professionals who should know better!) end up buying stocks or assets high and selling low, the antithesis of what you should strive for. Fear, greed, a lack of patience, and poor information lead us to “get in” on a popular investment when it’s already well on the rise and have to sell on the downslope, which is a huge mistake.
As a financial advisor and coach, one of the most important parts of my job is to help people manage their emotions, allowing them to make clear, calculated decisions with the appropriate timeframe in mind. We all are impacted by fear (and greed), especially when it comes to our own investments, so having an impartial, professional planner can really save you…from yourself.
We coordinate your strategy and any important money matters with your tax professional, CPA or enrolled agent. As I always say, never cross a government agency with just three initials in its name!
Have you ever heard the old saying that the first check you write every month is for the mortgage, but the second is for the insurance? Making sure you and your family are properly protected no matter what life throws at you will help preserve your wealth and a lot more.
The “right” financial advisor may mean different things to different people, but I suggest using an experienced, trusted professional in your own local community. Interview a few local financial advisors, ask all of the tough questions, review their references, and utilize someone with great communication who will have your interests in mind.
On that note, we’d love a chance to connect and earn your business, so please reach out to TrueView Financial today for a cup of coffee and a chat about your financial future.
You can schedule here.
Thank you for your business & trust,