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The money management mistakes to avoid


Lets face it, managing money can be adventure especially in today’s ever changing financial environment. Whether you have a portfolio of investments or it is just managing your 401k, there are mistakes to avoid if you want to have long-term success.
 
Why is setting it and forgetting a bad move for your investments?
As your life changes you will have different needs and that will require different investment strategies. Another reason that setting and forgetting is a bad move is that overtime you may need to rebalance your portfolio so that your diversification strategy remains intact.
 
How do people go wrong with trying to time the market?
People who try to time the market have the goal to buy low and sell high. Unfortunately, most can’t make this strategy work and end up taking losses with their investments. It is better to have time in the market rather than trying to time the market or in other words, invest regularly over a long period of time.
 
Why is doubling down on a particular investment a poor choice?
People often try to cash in on a hot investment and put too many of their funds in a narrow selection of investments. The problem is that when this investment ends up falling, your portfolio takes a very drastic hit. Diversification is the best way to balance high and lows of the market so that your portfolio doesn’t suffer too much.
 
How does not knowing your risk profile become a detriment to managing money?
If you investment in something you don’t understand and your personality is to worry about daily or weekly fluctuations, then you will make emotional decisions that are wrong for your investments. If you understand how you handle risk you will make better choices in the beginning and avoid having an emotional rollercoaster when your investment has problems.
 
What can go wrong with just going alone when it comes to managing your investments?
It is extremely important to know what you are investing in and how that investment fits in with your overall plan. Working with an advisor will provide you with the information you need to make sound decisions and keep your plan on track.
 
What’s the biggest mistake that people make with their workplace 401k?
Unfortunately most people setup their 401k, make their investment choices at the beginning and then never review them or use the tools provided to make changes over the course of their employment. This can lead to having less than you should have when it comes to retire because you have made many of the mistakes that were mentioned before.
 


Posted: 8/30/2019 with 0 comments

Categories: Budgeting, Investments, Money Matters, Planning, Retirement



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