mistakes to avoid while diversifying your portfolio
TRANSCRIPT
MISTAKES TO AVOID WHILE DIVERSIFYING
YOUR PORTFOLIO
THERE ARE A LOT OF THINGS TO CONSIDERWHEN IT COMES TO INVESTMENTS, THERE ARE
MISTAKES YOU DO NOT WANT TO MAKE WITH YOUR
MONEY. HERE ARE SOME OF THE COMMON MISTAKES
YOU SHOULD AVOID WHILE DIVERSIFYING YOUR
PORTFOLIO.
BEING OBLIVIOUS TO THE ECONOMIC CLIMATE
I.
There are different ways to go about investing. Holding on to stocks with no regard to market fluctuations may be a sound investment strategy that can be profitable in the long run. On the other hand, being completely detached from
your investments can leave you vulnerable in this volatile world economy. Always be aware of the macroeconomic conditions that dictate the growth of a company you might have invested in. This will help your portfolios in the long
term to stay relevant to your investment goals.
INVESTING WITHOUT CONSIDERING YOUR AGE
II.
In your 20s, your personal preferences in investments will be vastly different from the choices you make when pushing 40. An investment philosophy
developed through long term personal experiences with the financial market is only as relevant as the financial goals you set yourself as you age. Avoiding
rigid personnel policies and being financially willing to accommodate different goals you might set yourself in the future is very important. Another important
factor to consider is your evolving personal situation as you age.
FAILING TO REBALANCE YOUR INVESTMENT
III.
Rebalancing is the act of returning your investments to their original state of allocation. Investments require flexibility to account for market fluctuations. You
might have to make hard choices and sell assets that are doing well and buy others that might not be looking too profitable at the moment for long term benefits.
Investors often prefer not to rebalance because of short term losses they might have to endure. But this is a shortsighted act that will not reap benefits in the long
term.
NOT PICKING THE RIGHT INVESTMENTS
IV.
An investment model that is currently doing well should have been sought out at the beginning of its high performance cycle. This is an important part of investing
most people fail to understand. Committing to an investment model in the middle of it’s high profitability cycle could ultimately prove to be counterproductive. The
need of the hour is to identify investment options that are about to become lucrative. Only sticking with performing investment models will eventually land
you in trouble.
