When it comes down to it, we all want the same thing: a safe place to invest our money that will allow it to grow, securing our financial future.

But how we pursue that goal often varies greatly.

In fact, it’s reported that only 30% of American adults enlist the services of a financial advisor.

And 37% of Americans surveyed admitted to making “impulsive” investment decisions that they come to regret, according to Money Magazine.

Too often, as consumers, we are our own worst enemy, even though well-intentioned. Over my career as a financial advisor, I’ve seen the gambit of financial and retirement errors, so I wanted to highlight these 15 common investment mistakes to be avoided.

1) Trying to time the market

“Buy low, sell high” may be the most basic and widely known investment mantra, and yet it remains elusive for far too many people. Why? They try to time the market, which means making micro-decisions within a tight timeframe anticipating the market’s movement. Instead, that ill-fated strategy ends up being counterproductive in too many cases, and they are forced to sell low after buying high!

2) Buying and selling too often/day trading

Being overly active with making trades or “tinkering” with investments may not lead to the outcome you’re looking for – to optimize your investments and allow your money to grow. Furthermore, frequent trading often brings an overabundance of fees, which may diminish your money’s growth over time.

3) Relying on information from the media/general public

Trust me when I tell you that even the most highly attuned and experienced economists really have no idea what’s going to happen next with 100% certainty, and that’s definitely the case with the stock market. So, by the time information trickles down to the average consumer, don’t expect to be receiving timely, cutting edge, and comprehensive intel.

 4) Interrupting compounding 

As Albert Einstein said, “Compound interest is the eighth wonder of the world.” The key to successful investing is not “guess right” or timing the market but putting yourself in a position to take advantage of compounding. So, it’s wise not to interrupt the power of compounding whenever possible!

 5) Waiting too long to invest (not starting young)

Starting your investment journey earlier in life may be the single most important factor for growing significant wealth down the road. So, even if you have to start small, invest as early as possible, and encourage others to do the same.

 6) Not putting investments on autopilot  

Just like building savings or paying off debt, it’s best to contribute to your investments automatically every month, where a set amount is taken out of your paycheck or bank account without any effort or input from you.

 7) Racking up debt (opportunity cost)

When you amass credit card debt and pay it off slowly or only with minimum payments, you’re wasting a lot of money on interest. That same money could be used towards investing or other positive functions to benefit your financial future. That creates a large opportunity cost that you’re paying by racking up credit card and other debt.

 8) Thinking of your personal residence as your investment

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.

 9) Not being diversified

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! Diversification helps you do exactly that.

 10) Not being patient

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…

11) Buying high and selling low

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.

 12) Making decisions based on emotions

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.

 13) Not understanding tax implications

An IRS audit or tax trouble can negate an otherwise successful investment, so make sure we coordinate your strategy and any important money matters with a great CPA or enrolled agent. As I always say, never cross a government agency with just three initials in its name!

 14) Not being properly insured

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.

15) Using the wrong financial advisor

The “right” financial advisor may mean different things to different people, but I suggest using an experienced, trusted fiduciary 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 best interest 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.