Don’t Be An (April) Fool, Let Us Help You Avoid These Mistakes.

•    Freaking out when the market drops – No one likes to see a market drop. But if you spent time making a sound investment plan, and are confident in your investment choices, then this is the opportune time to average down and get great value.
•    Getting swept up in market euphoria – We see this all the time. Your investments are going well and you are on top of the world. You think it’s never going to stop. Guess what? It always does. Keep a level head during the ups and downs of your investments and the market. 
•    Speculating – Speculating is not investing, it’s gambling. If you don’t know the difference, get help. 
•    Too much or two little of everything – These are both problems investors seem to struggle with: over diversification and under diversification. You have heard the term “don’t put all your eggs in one basket”; the opposite is also true. Don’t spread your eggs over too many different baskets either. Choosing too many investments could destroy your performance, while having two few can significantly increase your risk.
•    Borrowing to invest (Leverage) - Our advice: Don’t do it. Let’s leave this to the speculators and gamblers. It happens time and time again, a margin call will cause someone to sell good assets at a bad time, and potentially cause huge loses.

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•    Not having a plan - Unless you have a sound investment plan, how do you know how you should invest? It is imperative to do your homework or ensure someone is doing it for you, hope isn’t a strategy.
•    Investing with emotion, not by process – Don’t get caught up in the emotional storms the market rains down on people. Have a process and don’t let emotion drive your decisions. See our other blog (matts blog link) to learn more about how we cope with this. 
•    Under or over reviewing of investments – Although you have done your homework and have a sound investment plan, that doesn’t mean you should neglect your portfolio. Review your portfolio on a regular basis to make sure everything is going according to plan. That being said, you can really drive yourself crazy by watching your investments every second of the day. Believe in your plan!
•    Holding too much cash or not investing at all – Your money isn’t going anywhere sitting in 100% cash. When you have the savings make sure your money is working for you and not just losing ground to inflation. 
•    Listening to the jack of all trades (master of none) – A lot of advisors or professionals claim that they are the one stop shop. News flash: this stuff is complicated.  At Tycuda Group, we are investors and we make sure we are good at that. That being said, if you want financial planning, accounting or a good lawyer, we can introduce you to the right people to create a network of highly specialized professionals - all working for you. 

 
 

•    Having an unnecessarily short time horizon – In some cases this is necessary, such as when you have a large expense coming up, but the longer your time horizon, the better your chances are to achieve or exceed your goals. 
•    Not knowing your risk tolerance when investing - Don’t mismanage your risk. Taking too much risk can be detrimental to your life, and not taking any may ensure you never get anywhere. 
•    Working with the wrong financial advisor – Know the facts about performance and fees and ensure you are getting value. We preach transparency and the value of what an additional 1% in returns can do for you. But in reality, this is just to give our clients the basics to understand how to start asking the right questions so you can get the right results.

Investing is very complicated. Unfortunately, people often make it harder than it already is by committing one or all of the investment sins listed above.  Through years of experience and investing, the Tycuda Group has been helping people eliminate the mistakes and maximize investment performance. If you have questions, we have answers. Don’t let the market fool you like it has done to so many before.