Back to Glenn's Library



Five Common Investing Mistakes

When done intelligently, investing can be one of the safest and most reliable ways to accumulate wealth. When done poorly, investing has the potential to be both financially and emotionally painful. Protect your finances and your sanity by avoiding these five common investing mistakes.

#1: Lacking A Goal
Every road trip starts with a destination. Once you know where you're going, it becomes a lot easier to plan a timeline, select the best route, and most importantly, decide where to stop for snacks. Like a road trip, investing starts with a destination. When you first determine where you would like your investments to take you, it becomes easier to plan the route to get you there. There may be a few detours along the way, but having a clear idea of where you are heading helps you keep the big picture of your financial goal in mind.

#2: Jumping On The Bandwagon
If a crowd of people is running in the same direction, instinctively we want to run in that direction, too. Though the fear of missing out may feel intense in the moment, impulsively jumping on the market bandwagon could have serious negative implications to your portfolio. Warren Buffet once said, "Be fearful when others are greedy and greedy when others are fearful." Always make investment decisions according to your financial goals and your strategy, avoiding the temptation to follow the herd.

#3: Putting All Your Eggs In One Basket
A key characteristic of intelligent investors is taking strategic action to minimize risk. Diversifying the types of investments in your portfolio may not only have a positive influence on returns, but can have the effect of mitigating risk leading to less ups and downs as the market ebbs and flows. Though it is impossible to eliminate risk entirely, a diversified portfolio can help stabilize performance and lead to a better night's sleep.

#4: Getting Emotional
With something as important as your financial wellbeing, it can be extremely difficult to eliminate emotion from your investment decisions. Getting overly excited or optimistic can quickly result in decisions that lead to future disappointment, while getting overly upset or pessimistic could lead to missed opportunities. Ensuring you are making investment decisions from a logical perspective rather than an emotional one will not only have positive influence on your returns, but it will help you avoid the emotional rollercoaster.

#5: Going It Alone
In a constantly changing environment, managing investments can be overwhelming. Utilizing the expertise of professionals who are constantly educating themselves on new trends, opportunities, and investments can take the guesswork out of reaching your financial goals. An investment advisor can assist you in forming realistic financial goals, determining the best course of action, and monitoring your portfolio's progress along the way. According to a 2019 study by Vanguard, advisors can add 3% in annual returns through their expertise and guidance in portfolio construction, wealth management and behavioral coaching.1

Again, in the wise words of Warren Buffet, "It is not necessary to do extraordinary things to get extraordinary results." Avoiding these five common investing mistakes may not only benefit your portfolio, but could provide more enjoyment on your journey to financial success.

If you have any questions about investing or are wondering how you can get started, I would be happy to meet with you for a no-cost consultation. You can e-mail me at gleest@wtwealthmanagement.com or call (928) 225-2474.

Sincerely,

Gleen Leest

Glenn Leest

SOURCES:

1 https://advisors.vanguard.com/iwe/pdf/FASQAAAB.pdf


Click here to view our Disclosure



WARRANTIES & DISCLAIMERS

There are no warranties implied.
Any opinions expressed on this website are the opinions of WT Wealth Management and its associates only. Material listed on this website is neither an offer to buy or sell securities nor should it be interpreted as personal financial advice. You should always seek out the advice of a qualified investment professional before deciding to invest. Investing in stocks, bonds, mutual funds and ETF’s carry certain specific risks and part or all of your account value can be lost.

At WT Wealth Management we strongly suggest having a personal financial plan in place before making any investment decisions including understanding your personal risk tolerance and having clearly outlined investment objectives.

View Disclosure
WT Wealth Management is an SEC registered investment adviser, with in excess of $100 million in assets under management (AUM) with offices in Flagstaff, Scottsdale, Sedona and Tucson, AZ along with Jackson Hole, WY and Las Vegas, NV. WT Wealth Management is a manager of Separately Managed Accounts (SMAs). With SMAs, performance can vary widely from investor to investor as each portfolio is individually constructed and managed. Asset allocation weightings are determined based on a wide array of economic and market conditions the day the funds are invested. In an SMA, each investor may own individual Exchange Traded Funds (ETFs), individual equities or mutual funds. As the manager we have the freedom and flexibility to tailor the portfolio to address an individual investor's personal risk tolerance and investment objectives – thus making the account “separate” and distinct from all others we manage. An investment with WT Wealth Management is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Any opinions expressed are the opinions of WT Wealth Management and its associates only. Information offered is neither an offer to buy or sell securities nor should it be interpreted as personal financial advice. Always seek out the advice of a qualified investment professional before deciding to invest. Investing in stocks, bonds, mutual funds and ETFs carries certain specific risks and part or all of an account's value can be lost. In addition to the normal risks associated with investing, narrowly focused investments, investments in smaller companies, sector and/or thematic ETFs and investments in single countries typically exhibit higher volatility. International, Emerging Market and Frontier Market ETFs, mutual funds and individual securities may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles or from economic or political instability that other nations experience. Individual bonds, bond mutual funds and bond ETFs will typically decrease in value as interest rates rise. A portion of a municipal bond fund's income may be subject to federal or state income taxes or the alternative minimum tax. Capital gains (short and long-term), if any, are subject to capital gains tax. Diversification and asset allocation may not protect against market risk or investment losses. At WT Wealth Management, we strongly suggest having a personal financial plan in place before making any investment decisions including understanding personal risk tolerance, having clearly outlined investment objectives and a clearly defined investment time horizon. WT Wealth Management may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. Individualized responses to persons that involve either the effecting of transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption. WT Wealth Management's website is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of WT Wealth Management's website should not be construed by any consumer and/or prospective client as WT Wealth Management's solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the internet. Any subsequent, direct communication by WT Wealth Management with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of WT Wealth Management's current written disclosure statement discussing WT Wealth Management's registrations, business operations, services, and fees is available at the SEC's investment adviser public information website (www. adviserinfo.sec.gov) or from WT Wealth Management directly. WT Wealth Management does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to WT Wealth Management's web site or incorporated therein, and takes no responsibility therefor. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

Contact Us Today

Call us directly at 800-825-0616
or Contact us by using the contact form below:

Your message has been sent. Thank you!


Cancel