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Woody's & Gerry's Top 10 Investing Mistakes To Avoid
Tags: Investing


·         Failing to Diversify.  If you have all your money tied up in a single investment and something goes wrong, you will lose all your money.  Too much diversification, however, will result in having too many investments to properly manage.

·         Letting Your Emotions Rule Your Decisions.  The most common mistake made by all investors.  A sure fire recipe for investment return disappointment, if not disaster.

·         Focusing Solely on Past Performance.  Investors usually think that the past performance is a good indicator of future performance but ignoring the fact that best performers can also turn into the losers over a period of time.  Past performance is no guarantee of future returns.

·         Investing Without Setting Clear Goals and Adopting a Plan.  It is very important to have a solid plan so that you can be aware of the risks and returns associated with your investment.  Once established, the plan needs to be followed.  A successful investor should set clear and achievable goals with timelines.

·         Ignoring Expenses.  One of the most common mistakes that beginners make is ignoring investment expenses and the impact that such expenses have upon investment returns.

·         Believing You Can Time the Market; Selling at the Top and Buying at the Bottom.  Timing the market is one of the most common mistakes that investors make.  Many investors make the fatal mistake of selling a valuable investment too quickly

·         Believing in Stock Pickers:  Another mistake is to have too much confidence in the ability of a broker or advisor to pick select stocks and consistently beat the market.  This is an expensive strategy rarely found to be rewarding over time.

·         Jumping on the Next Great Idea:  Following rumors without doing your own research and analysis.  Learning about and researching new investment opportunities is always beneficial.  Investing blindly, without requisite understanding, is rarely a rewarding strategy.

·         Focusing Only on Potential Returns.  If you forget about the inextricable link between risk and reward, you will most assuredly be painfully reminded.

·         Being Overly Greedy.  This is the most common mistake associated with trading stocks.  Don't be in a hurry to make quick money.

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