The 7 Mistakes Investors Make

Mistake #1: No Written Plan

I'm sure you've heard it before; people spend more time planning their vacations than their finances. It doesn't make much sense but it seems to be the norm.

A Fortune Magazine article stated that people with written plans for their investments average about 5 times as much money as those without a plan.

Of course the plan itself won't make you any money. But putting it in writing gives you focus and makes the investment decisions that much easier. Don't forget to review your plan regularly (at least once a year) to see if you're on track and if you need to make any adjustments. If you don't have a plan how can you know if you're heading in the right direction? The best plans are useless if they sit on a shelf collecting dust.

There are many ways to get started. If you are a do it yourselfer, there are plenty of websites with basic financial plans to get you started. If you have investments of any significance the holder of your money should do a plan for you (If they haven't already). If they can't or won't you should consider moving your money to one who can.

Mistake #2: Putting it Off

Waiting for the "right" time can lead to disaster. Procrastination comes in many forms. You don't start saving for retirement until it's nearly upon you. You should review your investments but there always seems to be more "important" things. What's more important than your finances? You think you can catch up later by contributing more or wait until the markets are "better".

Every day you avoid investing is a day you won't get back. The best time to invest always has and will always be today.

Mistake #3: Allowing Emotions to Drive Investment Decisions

Easily the two biggest forces driving the markets are fear and greed. Try to remember this the next time you listen to a radio or TV commentator explain what's happening in the markets. You'll hear either greed or fear over and over again.

Fear of rising interest rates. Fear of inflation. Fear of falling profits. Somebody's always afraid of something. This is why investors bail out when things look bleak and since everyone else is selling too; prices are down. This increases the loss in the value of the investments.

Greed on the other hand blinds investors. The thinking is it will continue forever. Don't forget the tech bubble of 2000. That was greed in its finest example. Many companies that hadn't shown a profit yet; were worth millions on paper. You can't ignore the fundamentals. Eventually it evens out.

Of course we all want to make money with our investments. But this can easily turn into greed when the desire for profit gets out of hand. At the same time we should respect bear markets but not enough to begin a panic that will exaggerate losses.

Mistake #4: Putting Too Much faith in Recent Performance

Whatever happened will continue to happen. That's true most of the time but the markets are unpredictable by nature and recent performance is a lousy indicator of future performance. The past does not equal the future.

Recent performance is a way of measuring an investments value but there really is no way to know. Longer term (at least 10 years) is better but is by no means infallible.

Investors tend to have an emotional attachment to a good performing investment. Often times to their detriment, by staying with it too long even when its run is over (Remember Nortel anyone?)

Mistake #5: Taking Too Much Risk

There is a very real possibility that you will lose money when you invest. Many investors take too much risk; they chase the latest fad or "hot" investment. The know that high risk can lead to high reward but think they are immune to losses or will somehow "know" when it's time to sell. Usually by that time it's too late.

Far too few investors actually understand the risks they are taking. Most don't understand what could go wrong and have a plan for what to do when it does.

This kind of risk taking is really nothing more than speculation, and is only ok if you are prepared and can afford to lose all you've invested.

Mistake#6: Not Taking Enough Risk

The flipside is those who perish the thought of losing any money at all ever. They want everything secure and guaranteed. Absolute security doesn't really exist.

Very low risk always means a low return. For example a GIC will guarantee you about 4 or 5% these days but if you factor in inflation it's only worth about half of that. If all your investments are with GICs you probably won't have enough money to retire with in the long run.

Of course risk is tempered by a long term approach. The markets have never lost money over a 10 year period or longer.

Mistake #7: Requiring Perfection to be Satisfied

There will always be an investment out there that's outperforming yours. Even if you happen to have the best performing fund this month, it's likely not to be in the same position the next month.

Perfectionists tend to chase the "best" investment using past performance as their guide. There's no way of knowing this will continue.

The way to increase the chances of a good performing portfolio is to stay the course. If you're always chasing for the "best" you'll never stay the course

How To Avoid These Mistakes

· Ensure you have a written plan that outlines what you must do to reach your goals. Use specific and measurable goals so you can easily keep track of your progress

· Educate yourself. Get research from reputable sources on investing. There are plenty of beginner investment books at your local bookstore or library. Remember to look for investment books of a general nature and not that of a specific investment or strategy

· If you don't understand an investment, don't invest in it. It will spare you a lot of stress

· Slow down. It takes time and patience to see a plan through and see real results

· When you notice emotions are driving your decisions, try to be disciplined. If you are having difficulty with that then consider seeking professional investment advice.

Jason Cohen is a financial planner and investment advisor working in the Greater Toronto Area. He has over 6 years experience in all realms of financial planning including investments, insurance and banking.

Jason specializes in alternative investment strategies and tax savings for his clients. He takes a different approach while helping his clients to reach their goals.

Jason can be reached at 416 556-7618 or email at jason@jcfp.ca. For more information go to his website http://www.jcfp.ca

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Internet Stock Trading - Live Out Of the Inbox

The perfect ingredients for the flourishing internet stock trading lies in the urgent need of speed coupled with assuring online tips and brokers. The 21st century, the information era has been completely overtaken by this information superhighway express called internet. Speed, time, place and comfort are the most dynamic features apart from being easy, hustle free and dynamic.

The stock's world has been revealed because of online trading as it provides opportunity even to a layman to invest in stocks. All you need is a PC laced with a software and online brokerage firm registration. Enrolling to online brokerage firms gets any trader access to the stock exchange on their computer screens that help them to bid for stocks. The price changes in the stocks can be seen and hence, buying and selling of stocks become a matter of seconds.

It no longer includes confusing paper work; it has become almost the first choice for any stock investor. No more, are they clinging to ancient methods of investments, which needed individuals to shed sweats in smelly and crowded markets of the stock exchange. Also, practical and feasible relations with a stock broker provides an opportunity to make free decisions as there is no broker present in person, all he provides is some tips and advices for investment. Though, one may avail full freedom through discount brokerages where a broker only has to maintain clients account and no more disturbing and advising factor exists. All this and much more, all online, is a drastic step.

Apart from that, internet stock trading has already proved itself to be faithful, fruitful and flawless. It gets easy investing sitting at home with added flavours of diversity and security, diversity in different stocks and security of accounts being provided by service providers. The different passwords are the key that lies with different investors, hence, making those transactions inaccessible to any other person without the permission of the investor.

Though, one may say that Internet stock trading comes across many frauds and scams, but it should be noted that there are not many Internet frauds in the stock market seeking to rob investors. All one need to do is not to trust completely and remain alert; after all it's the matter of hard earned money. Check the company's profile before investing and find out logical reasons to invest in.

Also, one may come across many suggestions, which must not be blindly followed. Finding your practical and suitable reasons to follow them is the right thing to do as most of the times the situations vary from each other. Apart being alert, it is necessary to be calculative about the future of the company as the bright future is going to pay.

Open an account with sogoinvestIf you are new to sogoinvest: Online stock trading investment

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Things to Know Before Investing In Stock Market

Stock market can be a great source of income if you can trade wisely. Wise trading means that the investors are guided by wit and knowledge. The trade can be a real hell for the ones who take it as a gambling and go on staking their money randomly on the stocks. If you are making investments randomly, there is a very small chance that you will gain. Frequently, the little that you gain would be consumed in paying fee to the stock broker. Now the question arises, what do you need to know before you trade stocks?

There are lots of books available in the market that tells you about the shares, the share market and about other related topics. Before stepping into the share market you should read at least a few of them. The Internet also provides you a vast amount of information on every aspect of the stock trade. Such huge amount of the information available can sometimes be confusing to you. But use your brain to judge what, from the information provided, is required for you and rule out the confusing part as undesired. If you want to escape from the pain of acquiring knowledge, investing in the stock market would be just as good as throwing your money into the dustbin.

You should also know about yourself, i.e. what kind of an investor you are. Some people study the market more subtly whereas some others merely take an overall knowledge of the various aspects. Also see how much money you have to trade with and what is your source that gives you money for investing. If you are taking the stock trade as a full-time income and it is your only source of income, you will have to modulate your investment and trading strategy, so you can support yourself. If the stock trade is your part-time income, you must know exactly how much your source of income allows you to invest. It is often better to invest amounts you can manage to lose, comfortably, so that you do not come under pressure. For, the higher pressure you are under, the greater is your chance to lose.

The common term related to the stock exchange is yet another thing you need to know before investing. The terms such as bull, bear, pig etc. are the commonly used ones in the stock market. For example, the bull represents the investors that always expect the stocks to rise in their value and the bear represents the group that expects the opposite. This means that the bulls in the market have a positive attitude whereas the bears are always negative. Knowing these terms would be a great help for you when you go out to trade. After this, you want to know about the stock brokers. Do you want a full-service broker or a discount broker? Do you want an online stock broker or a traditional one? Analyze your trading strategy and decide finally, take some trading tips from the successful traders known to you.

Pricing and Features for Sogoinvest Investment Packages: online investmentSogoinvest Interest Rates and Fees: trading stock options

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Tips On Stock Trading

Knowing the tricks of stock market trading can help you become rich in a matter of few hours. Prudence is the watch word in stock trading. Mentioned below are certain tips that can be very useful while trading stocks.

Research companies before investing in their stocks: It is important to spend some time on researching companies in which you are planning to invest because researching before you buy stock from that company, actually minimizes the risk of investing in the stocks of a company that is proceeding towards bankruptcy rather than profits. Try and focus on finding out what the company produces and also about what are the company's future plans for growth and expansion.

Invest in stocks of companies you trust: A good strategy is to invest in the stocks of companies that provide you with superior quality products and services that you use everyday such as the companies that manufacture your preferred toothpaste, medicines, clothing or even your vehicle. There are strong chances of other people also getting interested in investing in the stocks of the same company, owing to its consistently good performance which means that your investment will mostly increase with time.

Rise above emotions and loyalty: It is important to rise above emotions and loyalty when you are trading in stocks. Just because you have been using a particular company's products for years, and love their products, it does not mean that you should stick to it and keep their stocks in spite of steep fall in the company's stock values.

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