10 @ Ten Common Investor Mistakes

Investors, investment advisors, and professional investors all make mistakes. I have listed some of the most common and expensive mistakes below. These mistakes can end up costing investors a fortune over time due to the power of compounding. Small mistakes now end up costing a great deal of money over time. Numerous studies have shown that the average investor often ends up with only about half of the return that is available in the markets (or worse). This big shortfall is due to mistakes like these:

1. Trading too much. Being too short-term oriented.

2. Chasing performance (buying high). Investors seem to get most interested in an investment after it has already performed great for several years in a row. Those are certainly the investments/funds that get advertised most and talked about in the media. By doing this investors are getting in late and at high prices. Investment inflows into certain products tend to peak right near the top of a big move (remember all the inflows of investment into technology/internet stocks and funds at the peak of the last investment bubble?) Today investors buying emerging markets and Chinese stocks could be considered "chasing performance".

3. Ignoring expenses. Investing in high-cost products.

4. Not saving enough/Spending too much. Saving more or spending less is the most certain way to increase your portfolio year after year.

5. Too much risk or too little risk. Both can be costly to the long-term health/growth of your wealth. Too little risk often results in a portfolio lagging behind inflation over time.

6. Undiversified. Many investors are not diversified enough across a broad cross-section of asset classes.

7. Paying too much attention to "experts" in the media and short-term market "noise".

8. Ignoring the tax implications of investing.

9. Unrealistic expectations and overconfidence. Most investors think they are better investors than they really are. Many also still seem to think they should get 15%-20% a year in the markets (and unfortunately some plan on that for their retirement). They remember their winners and selective memory helps them forget all their bad investment decisions. Investing always seems easy when the markets are going up.

10. Not having an investment strategy, or not sticking with their plan. Many investors are just "winging it" when it comes to their portfolio. Inertia/fear keeps them from getting rid of bad investments and from coming up with a good long-term strategy and financial plan for their future. This is a critical mistake. "If you don't know where you are going, you probably won't get there".

Article Source: http://EzineArticles.com/?expert=Keith_Tufte

5 Simple Tips For Successful Mutual Funds Investing

Investing in mutual funds is simple activity, but most investors still do it the wrong way. Have you heard the phrase "Mutual funds simply don't work!"?

So many times.

If you expect that just throwing few thousands into the best performing fund in your country will make you successful, then I am not surprised it doesn't work.

If you are willing to think and do some effort developing an investment strategy, then I am sure you will crack the market and earn double digit from mutual funds investing. Constantly, year after year.

Here are five simple tips which will help you do that:

1. Diversify within the markets and fund types

This is really simple. If you invest in 3 mutual funds, don't pick all the 3 within the same market. Better combine mutual funds which invest in different market niches, or different regions of the world. Don't put all your eggs in one basket.

Another thing to consider is mixing the types of the funds. Pick one general funds with moderate risk level. Pick one index fund. One more conservative mutual fund. One which invests only in startup companies... You got the idea. Mix those funds.

2. Buy at low times

Most people buy when the mutual fund prices have been raising up for long time. They sell with panic when the market goes way down. Most people lose or don't perform well with mutual funds or any other investments.

Don't be one of them.

Low times are good times to increase the size of your investment. You get shares at lower price and the prices are much more likely to raise than if you bought at high times. Of course there are tons of other factors to consider, but in general, low market is better for buying more shares.

3. Use signals

There are various services online who offer buy and sell signals for mutual funds. They will tell you when to sell or buy a given mutual fund and will help you to achieve much better results than with "buy and hold" strategy.

There are few disadvantages of these services - they cost money and not always perform so well. But with some research you can pick a winner. If your portfolio size is big enough - at least $10,000 - the monthly or yearly fees will probably be justified by the improved results of your investing.

4. Look outside your country

If you love your country, that's great, but hope you know its economy can't always grow with the highest rate in the world (even if it is doing that now). The good investor ought to look at different world regions for good mutual funds.

Right now Asia (India, China), East Europe (Bulgaria, Ukraine, Romania), Latin America (Brazil, Chile) are hot. It would be nice to pick mutual funds who play some of those markets. And a small hint - don't go with the biggest international players like Pioneer - they are too conservative. You'd better invest in local funds in the countries you target - provided they accept foreigners of course.

5. Be consistent

Mutual funds investing is not a get rich quick game. Putting few bucks once will not make you rich. Consistency will.

Invest part of your income each and every month. Even $50 makes wonder when done regularly, month after month, year after year.

Article Source: http://EzineArticles.com/?expert=Tony_Clifton