Millionaires top 5 investments mistakes to learn from
By Dian Vujovich
Millionaires arenât that different than the average investor. Except, of course, theyâve got oodles of more money to play around with. But the amount of money someone has doesnât insure that they are smart investors. Nope. Richies make the same investment mistakes as everyone else does.
I canât tell you the number of times Iâve heard that weâre supposed to learn from our mistakes. And thatâs good advice no matter how or where weâve made those mistakes. From eating the wrong foods to hanging out with the wrong crowd, do things that cause problems for long enough and, if youâve got any working gray matter at all, youâll eventually see a plus-side opportunity to learn from your choice-based mistakes.
Before I was ever a stockbroker the first investing tip I got was from a student in a night school class. The student was an older guy and I was teaching a beginning calligraphy course. His tip: Invest in gold. I followed his advice on the gold stock suggested, opened a brokerage account and lost most of my money.
I learned a lot from that experience. On the dumb side, two lessons pop out: First, donât follow through on an investing tip from someone you donât know. Second, if you choose to, at the very least do some research on the company, its financials etc., etc.
On the not-so-dumb side, I opened a brokerage account. That was something I hadnât done before and had always wanted to do.
By now youâre probably waiting for me to write that the guy offering the tip was a hugely wealthy individual. But, I have no idea if that was the case or not. What I do know is, investment tips can turn into investing mistakes no matter where they come from. A unresearched tip heard at a private club like the Everglades or Beach Club can nick your investment portfolio as much as one heard learning about calligraphy down strokes.
The deVere Group, a global independent financial consulting group, asked 880 investors with investible assets of $1.5 million or more—100 of them from the U.S.—what their number one investing mistake was. The answer: not diversifying their portfolio.
Mistakes two, three, four and five, in that order, were âinvesting without a plan; âmaking emotional decisionsâ; âfailing to regularly review the portfolioâ; and âfocusing too heavily on the history of an investmentâs returnsâ.
As you can see by the survey findings, itâs clear that the forever told investment advice weâve all heard for years–diversify, invest with a plan, keep emotions out, review your portfolio and donât look at past performance as a gimme for future returnsâisnât always followed by the wealthy but ought to be. And those five tips ought to be followed by everyone else—wealthy or not.
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