As this is my first entry for 2010, I would like to welcome you to the new year and hope that it is a peaceful and prosperous one for you.
For my first entry this year I have reflected on some simple yet profound reminders that we should all take with us through 2010. After a great Christmas and New Year season I am getting back into the swing of reading other media coverage. Over the weekend I came across an article on CNN Money - The 6 biggest investing mistakes - written by Burton Malkiel & Charles Ellis, both well known authors and scholars and co-authors of their latest book - "The Elements of Investing".
I am a firm believer that it is the mistakes that investors avoid rather than necessarily the good proactive decisions they make that will define the success or otherwise of their investment experience.
Malkiel & Ellis put forward these mistakes as the biggies:
2) Following the herd - either in exuberance or distress
3) Timing the market
4) Assuming more control than you have
5) Paying too much in fees
6) Trusting stockbrokers
These mistakes are very much at the core of this firm's investment philosophy. I know very well that I have little ability if any to predict the future for investment markets and have absolutely no control over this destiny. What I and all investors do have control over is keeping a portfolio well diversified in low cost structures and investments that will position portfolios as effectively as possible (depending on tolerance to volatility in investment markets).
If you can follow a similar approach and avoid the 6 big mistakes you should be well ahead of the herd in the long run.
Have a great year.