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Investing Tips and Advices

Many investors don't draw a lesson from the mistakes they have committed during their previous investment year. The following are several investing tips and advices you should keep in mind if you want to avoid the common mistake of repeating your previous misfortunes.

  1. Don't embark on stock or fund picking.

    In their attempt to choose the next "hot" mutual fund or stock, investors often incur great losses. If you have money to waste, then you can embark on such entertainments. Otherwise, betting your money on something as sure as a lottery jackpot represents an unwise move that will only lead you to future headaches.

  2. Avoid chasing returns

    Here are some cases in which you should close your ears and listen to your common sense:

    • The top 50 stocks for the last three months listed in a financial magazine.
    • The publicly available opinion of a top investing manager or stock selector.
    • A 130% return a friend of yours has made in the previous year.

    Have in mind that these investment opportunities are already discovered by others due to their publicity. Don't follow the herd, because you will soon end up in a losing position.

  3. Focused investments.

    Whenever you consider the investment in a mutual fund make sure that the fund's objectives coincide with your goals and current financial situation and abilities. This means that you should carefully examine the degree of risk and allocation strategies incorporated in the mutual fund tactics. Be sure to adequately balance your portfolio and set in such a way that you feel most convenient with. Respectively, don't overlook international funds. In case you have invested a big percentage of your money in large cap growth funds, balance your portfolio with small cap funds and value funds.

  4. Constant investment activity

    The 401 (k) plan should be one of your main points of focus, since it will ensure you relaxed retirement years. The best alternative for you is employer matching, which means that you earn 50% on every 50 cents that are matched to one dollar. Your familiarization with compounding should lead you the early and frequent investments. Furthermore, consider down markets as an opportunity for making greater profits in the long term thanks to lower prices, not as a threat to your portfolio.

  5. Investment expenses control.

    Whenever you put your money in a mutual fund try to choose load free ones and those that don't include 12b-1 fees, since they significantly increase your expenses. Additionally, if you use the services of a broker, try to avoid paying high commissions or whatsoever commissions. You may be truly loyal and respectful to your broker and realize that the commission you pay him has helped him/her to buy that beautiful house. But don't you want to enjoy the comfort of such a house yourself?

  6. Lifelong education

    The fact that you are on our website reading the provided articles speaks for your commitment to lifelong education. But it should not be a sporadic event. Instead the continual reading of financial literature will develop your knowledge of the basic jargon required to make you a successful investor. By browsing through the information about others mistakes will prevent you from committing them yourself.

It is our goal to provide you with well thought out investing tips and advices about mutual funds in order to turn you into a successful investor.

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