By Joseph Palumbo III
While I believe we are climbing out of the recession, I also believe that now may be the time to capitalize on making solid investment decisions.
I attended a networking function recently in Astoria and spoke with several financial professionals about some of the mistakes investors make. The No. 1 mistake is investing in anything without first establishing an investment strategy. This means we are all in different stages of our lives and all have different risk tolerances.
Individuals in their 30s have a different outlook and more risk tolerance than investors in their late 40s. Investors in their 60s have different investment outlooks, approaches and needs with less risk tolerance.
Invest in the company. It will always be the company that is making the decisions that will cause its stock to increase or decrease in value. Do not chase a stock by buying more of it in the hopes of “dollar cost-averaging” your losses. You are still probably buying the stock at or close to its high point — thereby throwing away good money.
Do not pay too much in fees and commissions and have unrealistic expectations. The days of paying a stock broker exorbitant commissions are over. Shop the financial market for the best overall deal in terms of getting value for the commissions and fees you are paying.
You must also have realistic expectations when investing in anything. If it sounds too good to be true, it probably is.
So How’s Business regarding mistakes that investors make? When you think the market is doing fantastically, that is the time to not invest. When the market is not doing well, that is the time to invest. At the end of the day, you have to assess the risk vs. the reward and take the calculated risk that works best for you and your financial game plan.
Contact Joe Palumbo at 516-731-5466 or jp@camelotlimo.com.
