Common Mistakes Investors Make
Not Save Enough: Half of all Americans have less than $1,000 in savings (Wall Street Journal) – not enough to afford an ordinary disruption such as a major car repair, or healthcare bills. Savings are a precursor to investments.
Go At It Alone: Financial markets are complex, and investing requires expertise. Many investors try to “do it yourself.” Navigating through the intricacies of the economy and markets requires deep knowledge and understanding, and in turn a really experienced and trusted investment manager – no different from having a surgeon perform needed surgery.
Select the Wrong Investment Manager: The financial industry is opaque with many advisors pretending to be stock market and investment experts. Choose your investment manager based on their credentials, credibility, and experience, rather than likeability or familiarity through family and friends.
Cookie Cutter Strategies: Most investment advisors put their clients into standard cookie cutter plans, strategies, and products – many of which benefit the advisors through hidden fees and trails, and not the investor. As a result, many individual clients pay too much in fees, take inappropriate risks and their investment returns are sub-par.
Don’t Go By Emotions: Investors often let their emotions drive them instead of logic and sound decision making. They may tend to buy during overpriced markets and sell at market bottoms. Overconfidence through a few successes, rear-view mirror thinking, and fear of regret often result in errors. The feeling of a loss is much more severe than that for a similar sized gain. All these behavioral issues make it even more important that you leave the investing to professionals like us.