15 Common Investment Mistakes

1.                Not having an investment plan with clear goals to guide your investment decisions, and not reviewing that plan regularly (to check progress, make sure goals are still valid, etc.).

2.                Keeping too many assets in cash and other low-interest earning vehicles.

3.                Being too conservative – not investing enough money for growth.

4.                Investing in businesses and securities you know nothing about.

5.                Investing without understanding the associated risks.

6.                Investing in something that’s going to cause you to worry.

7.                Believing that something “too good to be true” really is true, and investing in it!

8.                Not following your intuition about whether you can trust any individual who is trying to give (or sell) you financial advice or products

9.                Not contributing to a 401k plan when there is company matching (passing up guaranteed returns of 25%, 50% or 100%). Similarly, not participating in a stock option offer.

10.             Continuing to own stock from a former employer solely because of company loyalty. Just because the company had a good outlook when you retired five years ago does not mean it still has a good outlook. Unless you have specific information or industry knowledge that the stock is still a good bet, sell it. Loyalty to a former employer will not fund your retirement.

11.             Relying on IRA accounts for all your investment and savings activities. If all your savings are in IRA form, your access to your dollars is hindered by IRA regulations, such as the 10% penalty for most withdrawals before age 59˝.

12.             Not buying or selling an investment because of fear of taxes. Look at the net earnings that are left after taxes, not the tax bite itself.

13.             Taking a full lifetime annuity at retirement without also buying life insurance to provide for the surviving spouse

14.             Using IRA funds to buy an annuity. Why use tax-sheltered money to buy another tax shelter?

15.             Doing nothing. Potential investors can get so overwhelmed with options and information that they become paralyzed into indecision and inactivity. A solution: break the decisions and down into smaller sets. Act on only one issue at a time and eventually all the issues will be covered.