Burlington, VT (PRWEB) May 31, 2017
We’re human, which means we all make mistakes from time to time. Unfortunately, some of those mistakes may have a longer-lasting impact than we’d like - like making errors with your investment management strategy. Luckily, with a little guidance and insight on what pitfalls to avoid you can stay on track. Dan Cunningham, founder of Vermont financial advisory firm One Day In July, addresses five of the most common mistakes investors make and how you can avoid them.
Not having a plan – First things first, and this may seem simple, but the only way to succeed with your investment strategy is to have a solid plan in place. Investing, like any other major life event, takes proper financial planning to ensure success on all fronts. You wouldn’t embark on a vacation on a whim, so why would you start investing on a whim? Look at the big picture. What are your goals? What assets do you have and how can you allocate them to this plan? What is your tolerance for risk? Figure out these answers and use that to guide your plan.
Working with the wrong advisor – An important component of the planning stage is also finding the right financial advisor to help you reach your goals. While many people may think they can go it alone, the reality is that in this situation an expert can provide valuable guidance and insight to help enhance your strategy. Unfortunately, not all financial advisors are paid only by you - they are paid by the funds they sell you as well. Be sure to ask advisors the sources of their compensation.
Starting late – There are many reasons for delaying investment planning, whether not having enough income, not knowing where to start, or simply not taking the time to think about the future. Unfortunately, the more you delay, the more you miss out on the benefits of compounding interest and each year you push off investing, you are losing money.
Not investing in index funds - While the lure of actively managed mutual funds with a quick payoff may be enticing, the reality is that your financial future will be brighter if you only invest in low-cost, diversified index funds. Not only do index funds beat their actively managed counterparts, but they are also a low-fee investment option, meaning it's easy for new investors to get started. To achieve financial freedom, this is the one mistake you must avoid!
Letting emotions lead – Far too often, investors find themselves lured in by the financial news. The financial industry is skilled at marketing its services with the promise to reduce your stress and it’s easy to let your emotions get the best of you. To keep your plan on track avoid being consumed by financial news. Instead, talk with your financial advisor who can help guide you through the ups and downs of the market and provide clarity during stressful situations.
For more information on One Day in July or to reevaluate your financial planning strategy talk with a Vermont financial advisor today or visit http://www.onedayinjuly.com.
About One Day In July
One Day In July is a Vermont financial advisory firm that helps individuals, non-profits, and businesses save and invest using low-cost index funds. Index funds are sweeping the nation, and they are one of the fastest growing trends in American investing and financial planning. By focusing on reducing fees for investors, including those of the financial advisor, One Day In July is bringing long-overdue changes to investors in Vermont and other states. To learn more about the services offered by One Day In July, please visit http://www.onedayinjuly.com.