Avoid These 5 Investment Mistakes
Make sure to avoid these five investing mistakes:
Putting all your investment eggs in one basket.Diversification is a familiar term in investing. Investing in a variety of investment alternatives helps decrease risk. If you have all your money invested in one company and that company does not perform well, your portfolio is going to suffer. However, by diversifying your portfolio, your overall return will not be as drastically impacted by the poor performance of one company.
Spreading your investments too thin. While there is value in diversification, overdiversification can be problematic. With too many investments in your portfolio, each one has little impact on your total return.
Expecting instant gratification. Investing takes patience. When investors jump into an investment seeking to get rich quick, they often find themselves giving up on an investment too quickly and miss out on returns that might have materialized over time. If you select an investment after careful research, you won’t need to monitor its every movement. Most investments will fluctuate, but good investments tend to appreciate over time.
Neglecting risk level assessment. Before investing money, you need to assess the investment’s potential for both upside and downside gains and losses. When you understand the risk an investment faces, you are less likely to sell based on emotion.
Skipping out on an investment education. Many people invest without knowing anything about the markets or the field of investing. Whether the cause is time constraints or confusion, lack of education can be harmful to your portfolio. You need a solid understanding of investment basics. Once the education piece is in place, investing becomes much more interesting.
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This newsletter was prepared by Integrated Concepts Group, Inc. The opinions expressed in this newsletter are for general information only and are not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. The views expressed are those of the author and may not necessarily reflect those held by PlanMember Securities Corporation. Material presented is believed to be from a reliable sources and PSEC makes no representation as to it accuracy or completeness.