Seeking Prudent Advice Archives - Page 19 of 23

6 Investing Mistakes To Avoid

Roger Wohlner is a fee-only financial advisor and one of our favorite financial bloggers. He wrote an article this week for U.S. News and World Report focusing on 6 mistakes to avoid in investing:

Inability to take a loss and move on.
Not selling winners.
Not setting price targets.
Trying to time the market.
Worrying too much about taxes.
Not paying attention to your investments.

Roger concludes, “If you are uncomfortable reviewing your investments, it may make sense for you hire a financial professional to take an independent look at your portfolio.”

Learn more in Roger’s article:

6 Investing Mistakes To Avoid – Yahoo! Financehttp://finance.yahoo.comInability to take a loss and move on. Psychologically, it’s difficult for investors to sell an investment with a loss. Often they prefer to wait until the investment at least gets back to a break-even level. However, that may never happen or may take a long time to do so. The best approach is to…

“for me, for you, for later” — First Steps to Spending, Sharing, and Saving

Seasame Street is helping parents teach kids about value with a new program to help kids develop good financial habits:

Each time your young child sees you spend money or use the ATM, she is building an understanding of what money is. You can guide that understanding with simple activities about making good choices; what has value; and spending, sharing, and saving. Over time you’ll see that, through everyday conversations and fun, you can help your child grow up to make good financial decisions.

View the multimedia program at SeasameStreet.org:

for me, for you, for later | SEASAME STREET| seasamestreet.orghttp://www.seasamestreet.orgFor Me, for You, for Later: First Steps to Spending, Sharing, and Saving, is a bilingual multimedia program created to help families share experiences in developing financial basics that will impact their children now and in the future.

Staying the course pays off for investors

Time heals financial wounds: Holding stocks for 20 years can turn bad returns to good

Historical data compiled by Oppenheimer show that stocks have not suffered an average annualized loss in a 20-year holding period (measured in rolling monthly periods) since 1950.
“Historical evidence suggests that longer investment horizons typically produce better results,” says Oppenheimer’s chief investment strategist Brian Belski.
“The lesson here is: Chill, stay invested, stay disciplined and be diversified,” Belski said.
Much of individual investors’ lagging performance is blamed on psychological factors. More often than not, they buy high and sell low rather than the classic winning strategy of buy low and sell high. Put another way, they sell the dips, rather than buy the dips.
“Fear,” Harvey said, often prompts investors to bail out of stocks after prices have fallen far and the worst of the decline is over. They make matters worse “by delaying getting back in” early enough to participate in the eventual recovery.
A key reason why investors who stay the course end up doing well is the fact that stocks go up roughly two-thirds of the time.

Read more in this article:

Staying the course pays off for investors | FLORIDA TODAY | floridatoday.comhttp://www.floridatoday.comThe long term used to mean three-, five- or 10-year holding periods for stock investors looking to wring out risk and boost their odds of making money. Then came the 2000s, dubbed the Lost Decade, when the U.S. stock market posted negative returns in a decade for the first time since the 1930s.

Fix your money mistakes: Not enough risk

“Probably the biggest shift I am seeing is that clients are solely concerned about their downside. And they are all too willing to give up potential upside just to be sure their downside is protected.”
Even with today’s sub-3% inflation, you can’t hope to keep up if your money is earning half a percentage point at the bank. When your portfolio lags inflation, your purchasing power is gradually chipped away.
Over the past 50 years inflation has averaged 4.1%; during that time, large-cap stocks returned an annualized 9.8%.
“As hard as it may be to stick with stocks, given what has happened history has proved that they have a great record of delivering inflation-beating gains.”

Learn more about common money mistakes and how you can fix them in this article:

Fix your money mistakes: Not enough risk – May. 19, 2011http://money.cnn.com/2011/05/19/retirement/mistakes-too-cautious.moneymag/index.htm(Money Magazine) — With every financial decision, you have to balance two competing urges: the desire to not be poor and the desire to be rich. Lately the former has been trouncing the latter.

$mart Money Newsletter ~ May 2011

$mart Money is a quarterly newsletter published by our company. The lead article discusses how our natural instincts can seriously erode our investment returns and how to avoid these pitfalls. The Investing 101 column reviews the basics of stocks and bonds.

Download your free copy of the $mart Money Newsletter

Beware Top Funds With Poor Investor Returns

Investor Return versus Fund Return

Investor return can be very different from the widely quoted figures for total fund return.
For example, the top-rated Fidelity Leveraged Stock fund has an annual return over the last 10-year period of 14.5%. However, the average investor in this fund had an average annual return of only 4.0%.
The reason for the gap is, most investors didn’t buy and hold for the 10 years. Instead, the average dollar in the portfolio stayed invested for short periods.
Many studies have shown that long-term shareholders receive the best returns.

Learn more in this article:

Beware Top Funds With Poor Investor Returns – Yahoo! Financehttp://finance.yahoo.com/news/Beware-Top-Funds-With-Poor-tsmf-514712389.html?x=0If you invested in Fidelity Leveraged Stock a decade ago, your total annual return would have been 14.5%. But the typical shareholder had an investor return of only 4.0%. The reason for the gap is, most investors didn’t buy and hold for the 10 years. Instead, the average dollar in the portfolio…

Is Your Money Safe With Your Broker?

Michael Hogan, CEO of FOLIO Investments Inc., helps answer this important question. By the way, FOLIO is the custodian and clearing broker for NorthStar Capital Advisors.

Michael’s key observations:

When fraud is involved, it is generally with introducing brokers who are able to cash your checks, and create a set of fake books.
It is nearly impossible for clearing brokers to commit fraud.
“The main way the system breaks down is when you deal with an introducing broker, and you’re told to deposit money with their firm. They steal it and circumvent the system and create statements with a color printer. You’re disconnected from reality and don’t have a cross-check.”

Michael’s main recomendations:

Only make out your check to its clearing broker, not the introducing broker
Get access to the clearing broker’s website so you can see your account.
Check your balances frequently.

Learn more in this article:

Is Your Money Actually Safe With Your Broker?http://www.businessinsider.com/is-your-money-safe-with-your-broker-2011-5When Lehman Brothers went bankrupt in September 2008, most investors faced a question they had never considered: Is my money safe with my broker?

Bad Investing Habits That Keep You From Growing Your Investments

Do you have bad investing habits?

Don’t be forgetful or lazy when it comes to your money.
Watch out for clutter in your portfolio.
Don’t be an obstinate investor
Know whom to trust.
Don’t be an emotional investor

Learn more in this post at The Digerati Life:

Bad Investing Habits That Keep You From Growing Your Investmentshttp://www.thedigeratilife.comAs an investor, do you find yourself with bad habits that keep you from enjoying great investment returns? There actually seems to be a tendency here for most investors to be unable to make any kind of money in the stock market. It appears that investment underperformance can be mainly attributed…

Finding Red Flags in Your Adviser’s Record

Did you know that one in 10 financial advisers in the U.S. have been involved in at least one customer dispute? How do you know your adviser is not among this group? There’s a new, free tool, BrightScope Advisor Pages, to help you find out. Learn more about it in the following article.

Finding Red Flags in Your Adviser’s Recordhttp://finance.yahoo.comBrightScope, a firm that rates corporate 401(k) plans, this week launched BrightScope Advisor Pages in an effort to facilitate comparison among registered investment advisers (RIAs) and broker-dealers. The service aims to give consumers free, in-depth profiles of 450,000 financial advisers, with…

Wealth is what you save, not what you spend

Wealth accumulation is not just a matter of how much one earns, but how much one keeps. Very often we find that the best investors really are the best savers.

Learn more in this MarketWatch article from Jennifer Waters.

Wealth is what you save, not what you spend – MarketWatchhttp://www.marketwatch.comAnd they’re not big spenders. In fact, most of those with big bucks live well under their means — think about Warren Buffet still living in that modest Omaha home — and they put their money instead toward investments that help them stockpile more wealth.

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