Anytime you invest, you’re taking a risk. Obviously, the
hope is that this risk will work out in your favor and that you’ll end up
making money. And, while some investments are riskier than others, it is
important to keep in mind that you do have some control over the investment process. By making smart choices and taking calculated risks where the odds are
in your favor, you can come out on top most of the time. Plus, if you are
careful to avoid the most common (and worst!) investment mistakes, your chances
of success are even better.
Mistake #1: Leaping Before You Look
As mentioned above, smart investing is about taking
calculated risks, risks where you’ve done your research and know that you have
a good chance of everything working out in your favor. When you neglect to do
that research and/or allow yourself to get swept in fast-talk or big promises,
there’s a good chance you’re going to be disappointed with how your investment
turns out.
In addition to learning everything you can about a
particular investment venture before signing anything or putting any
money into it, follow these basic tips:
l For
stocks, check the company size, revenues, profits, and projections
l For
mutual funds, look at performance, costs, and investment types
l For
financial planners, look for non-commission based, experienced, certified
professionals
Mistake #2: Neglecting to Think About Taxes
Some investments aren’t really worth it, even if you make a
profit, thanks to the huge amount of taxes you’ll have to pay. Thus, it’s
always important to think about the long-term tax implications of your investment choices. Instead of just seeing a potential for profit and going for
it, really study to see if that profit is going to be worth the taxes you’ll
have to pay, not to mention all the effort you’ll have to expend to get it.
Making choices with these things in mind will make your choices much better.
Mistake #3: Not Working with a Professional
Finally, don’t make the mistake of making all of your
investment decisions on your own. While you can accomplish a lot and make some
good decisions through your own research and hard work, it’s a whole lot easier
to trust in those decisions and to see potential problems you might not have
noticed when you have a pair of professional eyes helping you out. Find an
affordable investment advisor who will help you to make good choices. Doing
that and following these tips should ensure successful investments the majority
of the time. #InvestmentProcess
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