One might think that if anyone would be savvy about financial investments, it would be millionaires. After all, they can afford to consult some of the best financial advisors in the world, right? Not necessarily true! The deVere group recently surveyed 880 investors in the world with more than $1.5 million of investable assets and found that millionaires reported making some extremely common investment mistakes:
- Failure to Diversify
The old adage of not putting all your eggs in one basket is extremely true when it comes to investing. If you put all your money in one stock and that one stock plummets, you’ve lost everything. But if you diversify well enough, you will have other investments to fall back on and won’t be completely ruined by one investment taking a hit.
- Investing Without a Plan
If you don’t know much about investing other than “Buy Low, Sell High,” definitely seek the guidance of an experienced and reputable investment counselor. They can develop an investment plan tailored to your specific needs and financial goals.
- Making Emotional Decisions
Having the help of an investment counselor will help with this mistake. It’s commonly said that investing in the stock market is generally motivated 90% by emotion and 10% by reason. After all, when faced with potentially losing a great deal of money, people are likely going to make snap decisions to avoid losing it all. But an investment counselor can help you avoid making emotionally-charged decisions that could cost you money in the long run.
- Not Regularly Reviewing Their Portfolio
If you have investments, you need to keep an eye on them to make sure everything is performing satisfactorily. The last thing you want to do is take a look at your portfolio and realize you’re down a bunch of money because you weren’t paying attention.
- Focusing Too Much on an Investment’s Past Returns
Plain and simple, you have to remember that just because an investment performed a certain way in the past doesn’t necessarily guarantee it will perform the same way in the future.