Are You Losing Money to Common Investing Mistakes?

Millionaire Money Habits newsletter subscribers received a free copy of 10 Mistakes Every Investor Makes and How to Avoid Them. Warren Buffett teaches that making money in the stock market isn’t about how much you make on an investment, it’s how much you can avoid losing. During volatile times like these, Warren Buffett’s philosophy is more important than ever before.

How long has it taken you to build your retirement account to where it is today, and how many sacrifices have you made to make those contributions? Double check that you are not making some of these common mistakes that could be draining your hard earned retirement account.

Not Investing: The annual performance of the market is highly relied upon just a few top performing days. You can’t afford to not be “in” the market and miss those days, and studies have proven that you cannot time the market.

If you haven’t started investing, it’s important to get going as soon as possible. Decades of appreciation on your portfolio will produce enormous wealth, and time is the stock investor’s best friend. Being a long-term investor is a guaranteed way to become a millionaire, as it allows you to take advantage of the greatest wealth creating formula (see The Power of Compound Interest).

Not Taking Enough Risk: Being a saver will not get you anywhere. Even high-yield savings account and other fixed-income investments cannot keep up with inflation at today’s rates. That means you’re actually losing money by playing it safe with bonds and CDs. If this is where you are keeping your money, it is certain to under-perform.
Why settle for 3% or lower in investment returns when the stock market returns around 10% over a 10-year period? If you have a long way to go before retirement, take on more risk by adding more small-cap and international investments. In the short term they are more volatile than large-cap stocks, but they can produce exceptional returns.

Ignoring Taxes and Fees: Do you know how much you are paying for your mutual fund fees? How about the cost to purchase and sell your investments? Are you giving 35% of your profits to the tax man due to short-term capital gains? After all is said and done you may have lost money even if you portfolio had a stellar performance. Minimize your fees by using Zecco’s free-stock trading platform and investing in low-cost mutual funds.

Emotional Investing: How often are your investment decisions made by thinking “what if it goes lower,” or “maybe I shouldn’t sell . . . what if it goes higher?” Always have an investment plan and know what are willing to lose. Don’t let the media and “the crowd” influences your investment decisions. In fact, you may be better off doing the opposite. The masses are almost always wrong.

Are you making some of the other biggest investment mistakes? Download 10 Mistakes Every Investor Makes and How to Avoid Them for free by subscribing to the Millionaire Money Habits Newsletter.

Millionaire Money Habit: Investing mistakes are easy to make and overlook. Double check that you are not hurting the performance of your portfolio and learn how to avoid the 10 most common investing mistakes by signing up for the newsletter.

2 Responses to Are You Losing Money to Common Investing Mistakes?

  1. Dan Carreon says:

    How does compound interest work if the market slumps. In other
    words, if I have an investment where the interest is at 10%
    annually, compound interest at that rate over years would increase
    my money dramtically over time but that is not happening. Is that
    because the 10% in not guaranteed? How is compound interest work if
    I continually lose money in todays market?

  2. I pay a quick visit day-to-day a few blogs and information
    sites to read content, however this web site presents
    feature based posts.

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