WiserAdvisor – Blog

Main Menu

  • Home
  • Financial Advisor Guide
  • Financial Planning
  • Retirement Planning
  • Education Planning
  • Estate Planning
  • More
    • Personal Finance
    • Portfolio Management
    • Financial Trends/Government

logo

Header Banner

WiserAdvisor – Blog

  • Home
  • Financial Advisor Guide
  • Financial Planning
  • Retirement Planning
  • Education Planning
  • Estate Planning
  • More
    • Personal Finance
    • Portfolio Management
    • Financial Trends/Government
Financial Planning
Home›Financial Planning›8 Investment Mistakes That You Must Steer Clear Of

8 Investment Mistakes That You Must Steer Clear Of

By WiserAdvisor Insights
October 17, 2019
801
0
Share:
money

Last Modified on March 24, 2020

“The more you learn, the more you earn.”

This simple mantra should be your guiding torch throughout your financial journey. There is no single best way to make secure investments. It is only with good knowledge about different strategies that one can come to a prudent decision. There could be two approaches to learning:

  1. The smart way where you learn from other’s investment mistakes
  2. The expensive way where you invest and learn from your own decision lapses

And, there is nothing wrong in going the smart way. 

8 Common long-term investment mistakes that you must avoid

To err is human, but you must avoid these 8 common long-term investment mistakes. For, they may prevent you from amassing wealth for a smooth retired life.

Mistake #1: Procrastinating 

“I don’t have enough money for investing”, is a fallacy used by youngsters who just start their career. But, it is worthwhile to know, the magic of compounding ensures that even a small amount would reap huge benefits in the long run. Also, there are companies that facilitate small investments and could be scaled up in-sync with your income. Investing just $5 a day where you get 10% annual return could make you a millionaire by the time you retire.

Mistake #2: Not understanding the investment

One of the most common mistakes that investors make is not knowing the reason they are investing for. Making investments without clear goals and having no understanding of the investment, could be a major roadblock in your investment growth. For example, insurance products offer poor returns and may not be a good option for wealth creation. Hence, the choice of instruments becomes extremely important.

Mistake #3: Having a short-term plan

Expecting an overnight miracle from your portfolio is unreasonable. For most investors, frequent trading may be a mistake. You may accrue short-term profits, but as the market may turn volatile, you may end up losing most of it. A slow and steady approach towards your investment gives it the required time to potentially grow. Thinking long-term is even more important if your goal is funding retirement or college education for your kid. Your portfolio will work for you in the long run only if you have sound expectations from it.

Mistake #4: Not diversifying your portfolio properly

Diversifying, if done right, could lessen the investment risk. This is because it spreads your money across assets rather than putting all eggs in one basket. The goal of diversifying should be to add different investments rather than adding more assets with a similar risk profile. For example, if you are involved heavily in the U.S. stocks, you may want to put in some of your investments in gold, real estate, bonds, commodities and other assets. If one asset loses value, others may rise and provide a buffer.

Mistake #5: Failing to keep your emotions at bay

Emotions such as fear and greed may tempt you to invest or take out your investments form certain investments, especially, stocks. Keeping your emotions away may benefit you over a long-term horizon.  You should avoid selling an underperforming asset as the market may be volatile in the short run but may rise again giving you an average return. Understand your own risk appetite to keep yourself away from chasing a few dollars of futile gains. 

Mistake #6: Not seeking professional help 

Just how self-medication can be dangerous, trying to solve your investment problems all by yourself may turn out to be detrimental to your financial health. If you are new to investing, you should take the help of a financial advisor who can help you with asset allocation. These experts have years of industry experience and they are well trained to make prudent investment decisions on your behalf.

Mistake #7: Making decisions based on historical returns

Just because a certain fund or stock garnered huge returns previous year, doesn’t mean it would do well in the future as well. You should not be ignoring historical averages but, at the same time, your decisions should not be solely based on it. Rather, the decision should be made keeping in mind the current market situation. 

Mistake #8: Not investing enough in highly liquid assets

A liquid asset is that which can be readily converted into cash. Make sure a certain portion of your investments goes to liquid profiles such as Government bonds and large listed corporate stocks. It can be used as an ultimate risk management tool to avoid losses. Assets which have low liquidity can lock your investment and may cause unacceptable losses. 

To sum it up

Investments help you live a financially secure life.  And, investing is not as difficult as you think. All you need to do is make a few cautious moves. 

Want to reap maximum benefits out of your investments? You can approach financial advisors. These competent experts can help you craft an ideal investment plan.

Tags#financial advisorfinancial planningInvestmentpersonal financeWealth Management
Previous Article

Importance of Tidying Up Your Estate Plan ...

Next Article

How to Invest with Dollar-Cost Averaging?

0
Shares
  • 0
  • +
  • 0
  • 0
  • 0
  • 0
WiserAdvisor Insights

WiserAdvisor Insights

A team of dedicated writers, editors and finance specialists sharing their insights, expertise and industry knowledge to help individuals live their best financial life and reach their personal financial goals. We believe that there is no place for fear in anyone's financial future and that each individual should have easy access to credible financial advice.

Related articles More from author

  • Tax Brackets
    Financial Planning

    2021 Tax Brackets — How They Actually Work

    February 17, 2021
    By WiserAdvisor Insights
  • Determining Risk and Understanding the Risk Pyramid
    Financial Planning

    Determining Risk and Understanding the Risk Pyramid

    January 16, 2020
    By WiserAdvisor Insights
  • College-Funds
    Education Planning

    College Funds and Asset Allocation

    December 9, 2019
    By WiserAdvisor Insights
  • Do's & don't Financial planning
    Financial Planning

    The Dos and Don’ts of Financial Planning

    August 28, 2019
    By WiserAdvisor Insights
  • short-term
    Financial Planning

    How to Invest for Short-Term Goals within the Next 10 Years

    October 7, 2019
    By WiserAdvisor Insights
  • ETFs
    Financial Planning

    ETF 2021 Outlook: Things You Must Remember

    March 4, 2021
    By WiserAdvisor Insights

You might be interested

  • Plan-to-save-for-your-child
    Education Planning

    How Do You Plan to Save for Your Child’s College?

  • Late-Retirement-Planning
    Retirement Planning

    Retirement Planning If You Started Late

  • Investment Books
    Financial Planning

    5 Must-Read books for Investing

Don't miss out! Get our Helpful Financial Tips Newsletter

  • Popular Posts

  • The benefits of working with a financial advisor - WA

    The benefits of working with a Financial Advisor

    By WiserAdvisor Insights
    July 16, 2019
  • retirement-accounts

    Choosing the Best Retirement Accounts

    By WiserAdvisor Insights
    July 8, 2019
  • financial planning DIY-Checklist

    How to Prepare an Annual Financial Plan – Financial Planning DIY Checklist

    By WiserAdvisor Insights
    June 10, 2019
  • IRAs-Work-401

    How IRAs work? 401k vs IRA

    By WiserAdvisor Insights
    July 4, 2019
  • Retirement-Planning

    Retirement Planning checklist

    By WiserAdvisor Insights
    July 8, 2019
  • Financial-Advisor

    Why and When do you need a Financial Advisor?

    By WiserAdvisor Insights
    July 8, 2019
  • Financial-Professional

    How to prepare for a meeting with your Financial Advisor

    By WiserAdvisor Insights
    July 8, 2019
  • monitor your financial advisor

    How to monitor the activities of your Financial Advisor?

    By WiserAdvisor Insights
    July 16, 2019

Categories

  • Business Finance (2)
  • Education Planning (26)
  • Estate Planning (16)
  • Financial Advisor Guide (15)
  • Financial Planning (100)
  • Financial Trends/Government (2)
  • Personal Finance (8)
  • Portfolio Management (38)
  • Retirement Healthcare (1)
  • Retirement Planning (68)

WiserAdvisor is America’s oldest and largest independent network of screened financial advisors. We make it easy and convenient for consumers to find and connect with advisors in their area. We have successfully helped over 100,000+ individuals find their best financial advisor since 1998 with no match fees, no commitments, no obligation, and complete confidentiality. WiserAdvisor has been featured in The Washington Post, The Washington Journal, ABC, CBS, Yahoo and has been seen in numerous other leading financial news and information websites.

Follow Us

  • Recent

  • Popular

  • Education-Planning

    Education Planning Tips for Self-Employed Parents

    By WiserAdvisor Insights
    April 12, 2021
  • Robo-Advisor

    Can You Trust Robo-Advisors to Create a Solid Diversification Strategy

    By WiserAdvisor Insights
    April 9, 2021
  • Preserve-Wealth

    10 Strategies for Preserving Your Wealth

    By Jonathan Dash
    April 7, 2021
  • The benefits of working with a financial advisor - WA

    The benefits of working with a Financial Advisor

    By WiserAdvisor Insights
    July 16, 2019
  • retirement-accounts

    Choosing the Best Retirement Accounts

    By WiserAdvisor Insights
    July 8, 2019
  • financial planning DIY-Checklist

    How to Prepare an Annual Financial Plan – Financial Planning DIY Checklist

    By WiserAdvisor Insights
    June 10, 2019

Contact Us

Corporate Headquarters

12150 Monument Drive, Suite 700
Fairfax, VA, 22033

Business Hours

8:30 AM – 5:00 PM EST (Monday – Friday)

Email Address

wa.assistance@wiseradvisor.com

Phone Number

(703) 651-2060

Fax Number

(703) 259-4487

  • Privacy Policy
  • Terms & Conditions
© Copyright 2021 WiserAdvisor.com. All Rights Reserved.

Add WiserAdvisor - Blog to your Homescreen!

Add