How to Avoid Investing Pitfalls
Avoid Holding a Declining Investment
- Even though we are long term investors it’s important to avoid holding onto an investment with declining fundamentals, or one that is dramatically over-valued.
- Staying in an investment that will not recover significantly prevents you from deploying that money in an investment that can work in current economic and market conditions.
- The tech stock collapse of 2000 to 2002 taught us that, and many other lessons, including:
- Valuation matters. Good stock investments require a thorough and disciplined analysis of valuation.
- If you don’t understand the business model, you probably don’t need the company in your portfolio.
- The financial press doesn’t have your best interest at heart. They support their advertisers, not the safest way to invest money.
Avoid Commission Brokers
- Their research is designed to help commission brokers acquire and retain corporate finance and institutional business, not to help you select a reasonably priced stock or bond investment, or find the best performing mutual funds.
- Commission brokers are paid to generate transactions, not to manage your money in the most prudent way, or to hold on to your securities until it’s truly time to make a change.
- Commission brokers are trained as asset gatherers not investment managers. Their investment products (including the mutual funds they recommend) are generally high-cost/low-performance investments (recent studies have proven.)
Don’t Go It Alone
- If you don’t have time to do the research your investment choices will greatly disturb your sleep. Finding good stock investments is a full time job.
- Market and economic conditions change faster than ever. The data flow is overwhelming, even for experienced wealth management advisors.
- The best ways to invest your money, like the best ways to care for your physical health, are best decided by working with a professional, a fee only financial advisor.
As a way to introduce you to the quality of service I provide, I am offering an in-depth analysis of your complete stock portfolio. This is not a computer-generated report. It is a detailed analysis of each holding in your portfolio with recommended actions. If you would like to learn more, please click below:
Robert Hunter is a registered securities principal with and securities and advisory services are offered through Linsco/Private Ledger, Member
NASD/SIPC, and is licensed to discuss and transact securities business with residents of the following state(s): Arizona, California, Connecticut, North Carolina, Nevada, New York, and Washington. No information provided on this site is intended to constitute an offer to sell or a solicitation of an offer to buy shares of any security, nor shall any security be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under securities laws of such jurisdiction.
All Content Copyright © 2007 Robert Hunter, Registered Investment Advisor, Marin County, CA
