Mistakes happen. But when it comes to investing, there is no such thing as a little mistake. After all, every penny counts.
Here’s where some people go wrong.
Forgetting diversity matters: “You’ve heard the saying you can’t put all your eggs in one basket. Spread your investments across industries to minimize your loss if one sector is experiencing a downturn,” says Ogechi Igbokwe, a certified financial educator with OneSavvyDollar in East Northport.
Panicking when the market fluctuates: “Rough patches are normal. If you panic by buying more when it’s up or selling everything when it goes down, you won’t meet your financial goals. No matter what the market does, stick to your original plan,” says Mark Sette, a portfolio manager at Wealthsimple in Manhattan.
Not reviewing investments periodically: “You can’t just set it and forget it. In this day of automatic saving, most people want to put their investment on cruise control and check in whenever. Set a time frame and be consistent. Once a month, once every other month, or quarterly. Just be sure to check in,” Igbokwe says.
Investing too little to get your company match: “Perhaps the worst financial mistake you can make is turning down free money. If you don’t contribute enough in a 401(k) plan that has a company match, you’re turning down free money,” says Robert Johnson, president of the American College of Financial Services in Bryn Mawr, Pennsylvania.
Overpaying in fees: Says Sette, “Traditional advisers charge around 1 to 2 percent in fees — that can really add up. Paying less fees means adding more to your saving.”