Top 5 Mistakes Investors Make


The difference between successful investors and unsuccessful ones is often as simple as doing a few things right and steering clear of some common mistakes.  Avoid these 5 traps and you’ll be well on your way to achieving your financial goals.

Don’t Fly Blind

Would you start a major project at work without first setting some goals and creating a plan of attack to accomplish them?  What about if you were remodelling your kitchen or buying a car?  The answer is “of course you wouldn’t”.  So why do so many people fail to create a plan for their long-term financial goals?  In fact , in a recent Wealthminder survey, 82% of respondents said they did not have a formal financial plan.   These people are flying blind.  Don’t be one of them. Creating a basic financial plan isn’t complicated and doesn’t have to be very time consuming.  Answering a few simple questions about your goals, your current financial situation and your willingness to take risk is enough to see whether what you are doing is likely to work or not.  Once you have a plan in place, it becomes much easier to judge if you’ve gone off-course and it gives you a framework for making decisions on how to get back on track.

Focus on the Big Picture

When is the last time you thought about whether to buy or sell shares in Apple?  How about when you last thought about what percentage of your portfolio should be in emerging market stocks?  The reality is most investors spend all of their time thinking about questions like the first one and almost no time thinking about questions like the second one.  The problem with this is studies show over 90% of your long-term returns are driven off of your asset allocation choices and not the individual assets you select.

A key output of any financial plan is a target asset allocation.  Make sure your portfolio lines up with your planned allocation and you’ll be a step ahead of the crowd.

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    Roth vs Non-Roth Retirement Accounts: Choosing the Right Account for You

    Roth Retirement Accounts

    When it comes time to choose a retirement account, selecting the right one for you and your situation can seem like a daunting task. You might be plagued with insightful questions: What are the differences between each type of account? What if I pick the right one and I don’t use it to the best advantage? Or, even scarier, what if I pick the wrong one and I’ve made a huge mistake in planning my retirement?

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      7 retirement tips for people in their 20′s


      For most people in their 20′s, retirement is an abstract thing to worry about some time in the future.  Because it is so far away, it’s easy not to think about it.  That would be a mistake.  Here are 7 retirement tips to help get  20 somethings on the right track.

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      The #1 thing 20 somethings can do is to simply get started.  Over 45 years, every dollar you save now will turn into 32 if you get an 8% annual return.  You may not know exactly what your goals are or how much you will need Continue reading…

        Increase Your Returns By 1% Per Year Risk Free


        Now that I’ve got your attention, let’s discuss a simple technique you can use to increase investment returns in your taxable accounts.  It’s called tax loss harvesting.  It sounds complicated, but it really isn’t.  The basic idea is to sell your losers periodically (harvest the losses) and immediately buy securities that will perform similarly to replace them.  You can then use these losses to either offset other gains you might have or to decrease your taxable income by up to $3,000 per year.

        The key is to immediately buy a similar security.  We aren’t trying to time the market.  We just want to take advantage of market volatility and existing tax laws.  As an important side note, the replacement security can’t be identical or the IRS will disallow your loss by something called the “wash rule“.  However, this isn’t a difficult restriction to work around.  For example, let’s say I own $10,000 of an S&P 500 fund and the market has gone down 10% since I bought it.  I could sell the fund and Continue reading…