They’re too conservative for their own good.
When people are too conservative, like let’s say they leave their money in a value fund, sure, it won’t lose money, but it also won’t be able to keep up with inflation. If the fund earns 1 percent yearly, and inflation is 2 percent, then the fund owner stands to lose 1 percent annually. Being too conservative also runs the risk of not having enough when retirement comes.
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| Image source: 3dprint.com |
They invest too much in a single stock.
Several factors can lead to this. Whether it’s the employer’s stock as part of a person’s compensation or retirement account, or a gift that was given a long time ago, having all the eggs in a single basket is never a good idea. A good amount is around a maximum of 10 to 15 percent.
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| Image source: optionsellers.com |
They’re attempting to catch the market by timing it.
One big problem with the mindset of investors is that they’re trying to “time” the market by looking at the patterns. So many are hesitant to buy in because, in their minds, the market is “due” to go down – which in all probability, may take years to happen. What happens is the investor loses countless chances at raking in returns.
Charles F. Whitman is an investment strategist from Chicago. He uses his investment and technical knowledge to help his clients learn about investment strategies and boost their portfolios. Charles is also the founder of Whitman Asset Management. Learn more about Charles and his firm’s work by checking this LinkedIn account.
