is about taking risks, and when you do that, youre entitled
to expect a return thats commensurate with the level of risk
you take. But if youre not careful, your own mistakes can prevent
you from achieving the return that should be yours.
In my all-day
seminars I always discuss these traps, and I want to share them here.
I have identified 18 examples, and I hope they will let you learn
from other peoples mistakes so you wont have to learn
them yourself the hard way.
No. 1: No written plan.
puzzles me why people who spend days planning a two-week vacation
will make five-figure investment decisions seemingly on a whim.
Magazine article published in 1999 says people with written plans
governing their investments on average wind up with five times as
much money during retirement as those without written plans.
the act of writing a plan doesnt put money in your pocket. But
people who are methodical enough to put their plans in writing are
also likely to do many of the other things that lead to successful
investing. And of course, even the most brilliant plan is worthless
if it just collects dust on a shelf.
With a plan,
you can get back on course when you go astray. But without a plan,
you cant even know youre off course.
If you dont
have an investment plan thats right for you, developing one
should be your top priority. If youre a do-it-yourself type,
visit our Web site and look in the Basics of Investing section of
our Newsletter archives for an article called Dont Have
an Investment Plan? Start Here. Or get professional help from
someone who does not sell financial products.
No. 2: Procrastination.
the right time can ruin your results over a lifetime. Procrastination
takes many forms. You dont start saving for retirement until
its nearly on top of you. You know you should review
your investments but other things always seem more pressing. You think
youll catch up later when the market is better, when youre
making more money, when you have more time.
the irony, because the longer you wait, the less time you have. Every
day you delay is a day of opportunity that you can never, ever get
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