Ben Carlson has a great piece on how avoiding the crippling mistakes of investing will greatly improve your results.
Here is Carlson’s list of the biggest mistakes to avoid:
- Making investment decisions based on your political views.
- Confusing your risk profile and time horizon with someone else’s.
- Consistently trying to time the market.
- Losing site of your long term financial goals.
- Paying high fees on investments.
- Having high trading activity.
- Letting fear and greed take over at the extremes in market sentiment.
- Having the majority of your investments tied up in one asset (company stock, your house, etc.).
- Basing your decisions on what you heard on CNBC or Fox Business News.
- Following every tick in the market and constantly checking the value of your portfolio.
- Making too many short term moves with long term capital.
- Basing your investments on the most recent performance.
- Not saving enough.
For the ultimate backstop, Jason Zweig of the Wall Street Journal has a piece of advice most investors would be wise to follow:
Approximately 99% of the time, the single most important thing investors should do is absolutely nothing.
Be safe out there!