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Whether someone has $50,000 or $5,000,000 to invest, there are several investment pitfalls that any investor can fall into. One of our goals as financial professionals is to help clients avoid these pitfalls, which could be very costly. We have come across many mistakes and firmly believe that it could be much easier and less expensive to learn from others mistakes, rather than make them yourself.

Over the years, we have found the following items to be the most common investing mistakes we see investors experience. If you feel that you are or have been affected by any of these, please contact us and we would be happy to reassess your personal financial situation.

Unclear Goals

Most investors attempt to make the most of their investments. Being proactive and having clear goals and objectives in mind can help you optimize your situation. Benjamin Franklin coined the phrase, “If you fail to plan, you plan to fail,” and this holds merit when it comes to your investing strategy.

Once you have determined your goal, creating a comprehensive plan that will help you weather anything that equity the markets can bring is recommended. The last few years have taught investors that anything can happen so it’s healthy to plan for the possibility of expecting the unexpected. Not having a well devised plan that considers your risk tolerance, investment horizons, and investing habits, could reduce your ability to optimize your investments or worse, cost
you over time.

Your clear goals will help you stay focused and help dissuade you from going off course in times of uncertainty and volatility.

Choosing Your Investment Strategies Based on Someone Else’s Situation

“This is what my smart friend is doing,” is usually not a phrase that should follow when choosing your investment strategy. It’s easy 2 52 0 N. Sant iag o Blvd | Ora ng e, CA 92 86 7 | 71 4.5 47. 878 7Common Investing Mistake to Avoid to look at what someone else is doing and, if they are having success with it, be tempted to do something similar. However, their situation may be entirely different than yours: their starting point of entry could vary; their short-term and long-term needs could be different; they could have a higher risk tolerance; and their time horizon could be longer or shorter than yours. There are too many variables to entertain a strategy because, “someone else is doing it.” We understand that the infamous pressure of FOMO (Fear of Missing Out) could rear its ugly head when someone is having success with one strategy, but jumping on board that strategy without taking into consideration your unique situation could be a costly mistake. This is sometimes referred to as the bandwagon effect – a phenomenon in which people do something primarily because other people are doing it.

Choosing investment strategies should involve critical consideration and thinking. With the help of an investment professional, do your due diligence before making any investments strategy changes or moves.

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