10 Common Investing Mistakes
reading articles or blogs online titled “common investing mistakes”. C'mon: if these folks really did know of what they speak, don't you think that they would be tooling around town in a Dodge Viper, rather than hunched over a word processor with a sweaty brow?
Gold, I tell 'ya, Gold!
Thinking that gold is special. Yes, it is an important commodity, but no more so than corn or oil or palladium.
There are many investment “advisers”. Sadly, they are more interested in collecting fees from your account rather than making you rich. You should be in control of your investments, which means learning about same, which means devoting some of your time right here on TMF.
I Have Seen God and...
Thinking that Warren Buffett is some variety of genius or brilliance. His secret is discipline: choosing a principle, and sticking to it through thick or thin, and with his own $$$.
Ignoring the Magic of Compound Interested
If you put $100 into an account and it grows at 5% per year, your stash will grow to $252 after 20 years. Conversely, inflation will eat away at your savings equally fast.
Ignoring Your Progeny
If a meteor were to land on your head in an hour, would your family be prepared? Do they know the who/what/when/where/why of investing? Do you have the relevant gaggle of insurance policies? Are you saving your money for them, or living paycheck-to-paycheck? Are you trying to increase your annual earnings from your job(s)?
Converting an IRA to a Roth
look: you have already done a good thing by saving for the day when you will be an old fogy (some of us are closer than others). Saving for same you can choose an IRA (totally tax deductible) or a Roth (not tax deductible up front but withdrawals are tax free). Converting the former for the latter makes no sense: you will owe Uncle Sam a whole lotta taxes, for no reason. Leave your IRA alone: those telling you to convert are simply angling for the usual fees.
Listening to the noise
Let us take AAPL as an example, being the most followed stocks by Wall Street. Everyday, including right here at TMF, you can be assured of several articles on the latest machinations thereof. Very little of this is significant, and most of it simply the latest musings of the author. Separating the wheat from the chaff is not easy, but try to be swayed by it. The only TMF articles I find of use are the ones analyzing the latest 10Q/10K filings.
Taking History seriously
What may or may not have happened in the past tells us nothing about will happen next year, next decade, or even tomorrow. The rubric that he who ignores the past is doomed to repeat its failure, I find to be particularly useless.
Fretting about life rather than enjoying it
You are trying for a comfortable retirement, because you enjoy your life and wish the fun to continue after you retire.
Gambling rather than investing