The biggest mistakes that investors make are:
1- Starting Too Late
The time to start is now. The power of compound interest is astounding - the earlier you take advantage the more it will work for you. If you start out earlier, you can start with less, invest less and still end up making more than if you started out later.
2- Paying High Fees
Broker's commissions can negate all of the hard-earned interest that you have accumulated. Don't let this happen to you - pay attention to what you are being charged. The more you pay, the less you keep.
3- Investing Emotionally
Successful investing consists of planning and reason. Once emotion gets involved, it can ruin all of the planning and reason that you had used to construct your investment strategy. Keep using the strategies that have consistently made people rich over the years, don't look to follow the new and exciting strategies that haven't yet stood the test of time.
4- Using a One-Size-Fits-All Plan
Your individual needs should trump any ideas of blindly following any plan. Keep an account of how much risk you are willing to take, and what your time frame is. Your portfolio should match your needs.
5- Not Taking Taxes Into Consideration
The net profits from stocks are taxable as capital gains. Being in a tax-deferred investment account will stop this from eating away at your savings.
6- Overly Risky Investing
Being extremely risky can pay off big time, but it can also leave you with a diminished nest egg it you gamble wrong. There are many great investments that offer decent returns without putting your funds in excessive danger.
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Source: Thomson Reuters