What is the key to investment success?
a. Finding the right investment
b. Being cautious
c. Taking risk
d. Developing a plan
e. Starting with a lot of moneyThe answer is "d"
Nothing matters quite so much as developing a plan and having the discipline to stick with it. Weaving in and out of different investments is a recipe for disaster.
"Don'ts" for Today's Market (excerpt from "7 deadly investing sins" moneycentral.com Emory Thomas Jr.)
Don't try to 'play' the war. It is impossible to synchronize your investments with entirely unpredictable political and military developments. None of us knows how stocks will react in the event of a war. We don't base our investment decisions on pure guesses at other times. Why do so now?
Don't 'lust' after safety. Those who are overexposed to "safe" investments could lose value with a stock recovery. Rather than diving in and out of the market the investment risk should be spread around. An investor will not always enjoy the biggest gains this way, but will also not suffer the greatest pain.
Don't just throw up your hands and sell everything. Depending on circumstances it may well make sense to sell out. But think very, very hard about it first. Panic is an emotion that drives many of us in times like this. Before making in decisions, call for advice. Investment Consulting Group, Inc. can help you make sense of your particular situation.
Don't mistake micromanagement with planning. It is important to develop a long-range plan. Don't focus on what your investment is doing day in and day out. Your goal is to be a long-term investor not a day trader.
Don't ignore your investments. In the 1990's it was appealing to take risk as the market was climbing. Those who have since ignored their investments may be falling behind their investment goals. There is no need to overreact, but there may be a need to act.
