Classic blunders many people make when investing and the steps you can take to ensure you don't do the same. Download the 8 Steps to Organize & Optimize Your Financial Life: [ Ссылка ]. Scott Weiss is a Certified Financial Planner.


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Video Notes:
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Year after year, in bull and bear markets, investors make some all-too-common mistakes. Here are 6 classic investing mistakes and what you can do to avoid them:

MISTAKE #1
Caving Into Emotion

Investors often use past performance to justify their greed – “it did well recently, I better buy more of it.” On the flip side, fear prompts panic selling. So, what should you do?

Option #1: Use a Stop-Loss Limit

One option is to use a stop-loss limit -- it instructs a brokerage to sell a stock if it drops below a specific value.

Option #2: Work with an investment Advisor

Another option is to work with an investment advisor to do the work for you and remove your emotions from the equation.

MISTAKE #2

Investing Without a Strategy.

Some people invest with one idea in mind – making money. It’s a great goal, but it shouldn’t be the ONLY thing you focus on when investing.

What To Do: Don’t forget your other investing priorities

This includes tax efficiency, managing risk and reviewing your asset allocation.

MISTAKE #3
Not properly diversifying.

Just as sports fans stick by the Cubs through thick and thin, some investors stick with a few core investments for years. Conversely, some portfolios are overdiversified and hold too many investments.

What To Do: Make sure your portfolio is diversified

Make sure your portfolio maintains proper diversification for your investment objectives



MISTAKE #4

Poor tax management of investments

Some investments are better held in taxable accounts and others in tax-deferred accounts. You need to know which to use when. Also, when you retire and tap into your savings, you can potentially improve tax efficiency by drawing down your taxable accounts first.

What To Do: Know Which accounts to use



MISTAKE #5

Not reviewing portfolio allocations.

A long-term asset allocation strategy starts with defined percentages. Over time – and it may not take much time – the percentage allocations go out of whack.

What to do: Rebalance your portfolio annually

You’ll want to rebalance your portfolio AT LEAST annually to ensure the portfolio is properly aligned with your allocation strategy



MISTAKE #6

Investing Near a Market Peak

Many investors play the market in one direction, which is up and pay the price on the way down.

What To Do: Have a strategy and stick to it!

A buy-and-hold philosophy may prove very rewarding, as long as you don’t hold too rigidly or too long in the event of a sustained, systemic shock to the markets.

Fear, greed, bias, randomness, inattention – these are the root causes of the classic investing blunders. We have all made them; patience and experience may help us avoid them in the future.

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Sources

1 - This material was prepared, in part, by MarketingPro, Inc.


Disclosure:
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Weiss Financial Group is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities product, service, or investment strategy. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser, tax professional, or attorney before implementing any strategy or recommendation discussed herein. Insurance products and services are offered through individually licensed and appointed agents in all applicable jurisdictions. The advisers at Weiss Financial Group are not attorneys of a law firm but can provide guidance to the client’s other professionals.



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