What are some common investor mistakes I should avoid?
• Too cautious Over the long term, stocks offer you the best chance for earning inflation-beating returns. While past performance is no guarantee of future performance, choosing a diversified mix that includes stocks or stock mutual funds in your portfolio may give you the best opportunity for potential growth. • Not diversified Investing in only a few companies or in a single market sector exposes your portfolio to the risk that your investments could lose value, leaving you without gains from other investments to cushion your losses. Diversifying your portfolio can help you manage your risk. That way, if one sector of the economy or one investment class is not performing well, your other investments may pick up the slack. • Short-term thinking No one is saying that you should never sell an investment, but trading investments frequently can lower your returns. In addition to paying trading costs when you buy or sell, you’ll pay taxes on your gains at your regular income-tax rate on an
