Investing Trends to Avoid #1: Sell, Sell, Sell
When a particular investment class is going crazy, it’s tempting to jump on the bandwagon of rapidly rising investments or, on the flip side, frantically dump the slower moving ones. The trick is staying true to your plan. Don’t follow the investment trends when you see a different asset class out performing your portfolio. Doing so could cause you to lose out on your long term growth potential. Instead, the market has proven over and over that a buy a hold strategy is best.
Investing Trends to Avoid #2: Using the Wrong Yardstick
Diversification is advantageous to a healthy investment portfolio. Investing trends flex back and forth, and if you’re using the wrong benchmarks to assess your portfolio you could be stressing when you should be celebrating. According to William Starnes, founder and senior advisor at Mallard Advisors in Hockessin, Delaware. U.S., “investors often gauge their returns against the Standard & Poor’s 500 index. But S&P 500 returns don’t reflect a broadly diversified portfolio. That’s especially noticeable when the index outperforms, as it has in recent years, or underperforms.” Instead, he suggests identifying an appropriate benchmark indicative of the diversification in your portfolio.
Investing Trends to Avoid #3: Leave Money on the Table
This is an investing trend? Yes! Unfortunately, too many people fall down this detrimental course. Ladies and gentlemen, I implore you, please join your company’s matching program – it’s free money. Imagine that your neighbor has a money tree in his backyard. “Come over anytime and pick a couple of dollars,” he offers. You think about it and respond, “nah, I’m good, thanks.” Preposterous right?! That is what you are doing when you don’t take advantage of your employer’s matching program. You can follow the investing trends and utilizes diversification tactics, but if you’re skipping this step, you are losing out big time.
Investing Trends to Avoid #4: One Track Mind
Too many people out there are fixated on one type of investment: single stocks, mutual funds, fixed annuities, variable annuities, the list goes on. They ignore the benefits of diversification and sadly, many do not take advantage of the precious metals market. In the last decade and a half, retirement accounts that had precious metals in them had less volatility and outperformed the Dow Jones and the S&P 500 index. From 1997 until today, a portfolio that invested 50% in the Dow Jones Index and 50% in the S&P 500 Index, would be up approximately 155%. Compared this to the portfolio that consisted of 50% Gold and 50% Silver would be up approximately 249%.
According to researchers Myra P Saefong and Mark Decambre
Gold has climbed nearly 17% so far this year amid global market turmoil, compared with a decline of 9% for the S&P 500 SPX, +1.44% and a year-to-date drop of 8.7% for the Dow Jones Industrial Average DJIA, +1.34%. Moral of the story: expand that one track mind and diversify your investments.
Your Next Step
If you’ve fallen prey to any one of these four investing trends to avoid, there is still hope for you. If you’re used to selling and panicking over market fluctuations, contact a trusted advisor to help you select investments that you are confident in holding for a while. If you don’t know where to find the right benchmark to gauge the value of your portfolio, again seek out a confidant in the industry. If you haven’t enrolled in your company’s match program, get on it first thing! And if you need to diversify your portfolio contact us at Landmark Gold. Our friendly and knowledgeable personnel will guide you through the process.