Published On:Monday, January 6, 2014
Posted by devil
9 Things Successful Investors Avoid at All Cost By Helyn Bolanis
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What defines a successful investor? What is success to you?
Some may define their success differently, but in the investing world, it's plain and simple. It's about meeting or exceeding your investment objectives.
Successful investors know how to manage their assets, and are knowledgeable about the industry. Whether or not you're investing your own money, or someone else is doing it for you, there are a few things every successful investor should avoid doing.
We've shared plenty of ideas with our readers about what you need to know about investing.
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| 9 Things Successful Investors Avoid at All Cost |
Here are 9 behaviors to avoid when it comes to investing your money.
1. Never Hire an Investment Firm Based Only Upon a Referral
Do some research, check them out with the branches of federal and state legal and supervisory oversight agencies.
We sincerely appreciate when our happy clients generously send a referral to us, but a satisfied client should not be the only criteria you use to find an investment manager.
We believe you should check out the firm with oversight agencies to be sure there aren't any red flags. Legal and supervisory oversight agencies will bring any red flags or problem areas to your attention.
2. Never Use More Margin Than You Can Afford to Lose
If you cannot afford to lose, don't use margin. Margin is borrowed money. Brokerage firms tout margin to provide you with more dollars than you have, so you can buy more investments.
It's a solid strategy employed by many. But be careful. Remember the stock market crash of 1929? Margin calls (having to pay the piper) was the downfall of many.
3. Never Assume You Understand - Ask Clarifying Questions
The financial industry has a plethora of vocabulary, acronyms, and legalese. You are not expected to know the purpose and significance of every term and strategy.
Never be self-conscious about asking your manager to explain what they are talking about. Clarification equals good communication.
4. Never Jump to Conclusions
Many con artists rely on you jumping to conclusions about what they say. In that way, they can say they told you, and YOU must have jumped to a wrong conclusion. Making it your fault that you didn't understand is their playbook.
5. Never Accept Unverified Performance Figures
Anyone can say that they can make spectacular returns. Yes, anyone.
In this day and age, there are rules to ensure that the numbers presented are indeed presented accurately.
The Global Investment Performance Standards (GIPS) were created and are administered by the CFA Institute, the global not-for-profit association of investment professionals. They are the watchdog who sets the standards for all firms that manage money.
Firms who want to advertise their performance should be compliant with GIPS. It's a detailed and lengthy process for the firm to go through every year, but so what. If they want to have the privilege of your business, then there is no question. Never accept less.
6. Never Commingle Your Money With an Investment Advisor Funds
If you don't pay attention to the other 8 behaviors, please follow this one.
For the majority of unaccredited investors, you should never place your money into the account of the investment managers. Think Bernie Madoff. There is nothing more to say about this.
7. Never Sign Paperwork Without Reading it Thoroughly
How often have you felt under pressure when reading a document that requires your signature?
Are you made to feel like a slow reader or that you do not trust them?
Forget it. Read the document. It's your money. Your life savings. Your future.
8. Never Agree to Allow Your Funds to be Locked Up
Lock up periods seem to be getting longer, and if you are allowed to withdraw your funds prematurely, the penalty is going to get higher and higher.
Don't assume the lock up period will be shorter because someone thinks it might. Read and accept it as gospel truth. If the period is too long, then it's not for you.
9. Never Retain a Firm or Individual Without First Checking Them Out With the SEC and State Regulatory Agencies
This is like #1, but it deserves another hearing. The Securities and Exchange Commission (SEC) is entrusted to enforce security laws. Do they catch every crook?
No, of course not. But at least if you check with them and/or their companion counterparts at the state level, you are doing your own due diligence. If you don't do this step, shame on you.
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If you're considering investing your wealth, or hiring a firm to manage your assets, take these tips into consideration. It's imperative that you take proper steps so you will not be ripped off.Your life can be made easier by following recommendations like these that have helped investors save time and money. We hope you find these points valid and if we can help even one person avoid being scammed; we feel we are fulfilling our mission.Are you thinking about hiring an investment advisor, or would you like more information about the way we invest?Contact us to see if our strategy is in line with your investment needs.
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