More Investing Mistakes Provided by Other Bloggers

Last Monday I wrote an article providing my opinion on the top 3 investing mistakes that investors make. In that post I tagged three other fellow bloggers to do the same and provide their choice for their top 3 investing mistakes. Here are the results of that challenge so far, as well as the opinion of other bloggers who decided to participate (thanks for that!).

As a quick reminder, my choice for the top 3 investing mistakes included:

1. Not Creating and Adhering to a Properly Structured Asset Allocation
2. Compulsively Checking Your Stock Prices
3. Keeping Your Investment Assets in a Savings Accounts

Dividends4Life
The first responses I will present here are from Dividend4Life, who gave us these three investing mistakes:

1. Waiting Too Long Before Starting To Invest
“Time is the investors most powerful tool. With time a multitude of mistakes can be overcome and fortunes can be built.”

2. Focusing On Current Yield and Not Future Yield
“Dividend investing is about future yield, not current yield. It is not necessarily starting with a high-yield investment, but ending up with a high-yield investment. This usually occurs by buying investments with a moderate yield, a history of growing dividends and letting time do its job (see #1 above).”

3. Not Doing Your Homework Before Buying a Company
“Getting to know a company is like getting to know a person - they are all unique and will likely require you doing something different to gain a full understanding of the company.”

Quest for Four Pillars
Four Pillars is the second blogger up - here are what he provided as his choice for the top 3 investing mistakes:

1. Selling Equities When the Market Went Down
This is a a very important one - acting on emotion because of a declining market is never a good idea.

2. Not Learning About Investing or the Funds that I Was Investing in Until a Couple of Years Ago
Investing is all about learning about the assets you invest in to make sure they fit your needs, and understanding the basic principles of investing.

3. Investing for tax reasons
“I calculated a while back that if I had taken the equivalent amount of money (without the extra tax credits) and just invested in a normal Canadian mutual fund (high fees and all) I would have about $30,000 right now so this mistake cost me around $25,000.”

Canadian Dream: Free at 45
Canadian Dream was tagged by Four Pillars to provide his choice for the top 3 investing mistakes:

1. Buying a Stock (i.e. a Junior Mining Stock) With Little Understanding of the Company
“If you don’t understand what the company does to make money, don’t buy it”

2. Buying an Asset Only for Its Yield
“Don’t reach for just yield without looking at the rest of the numbers, you will likely get burned.”

3. Speculating for the Wrong Reasons
“Speculation is ok if you keep the dollar value to something you can lose and you don’t sugar coat it to yourself. Speculation is NOT investing. Don’t confuse the two.”

There were also some mistakes provided through the comments section of the post. Here was these had to say:

Dividend Growth Investor
In the comments section, Dividend Growth Investor provided his picks:

1. Not having an investment plan or changing investment strategies too often
“Without an investment plan, you are guaranteed to not reach your financial goals and be stuck in the mud forever.”

2. Buying into HOT sectors, which have experienced a strong uptrend over past periods
“Buying stuff just because it is going up works for some time, untill your investment starts falling and you keep praying it will go up..which never happens.”

3. Not starting to invest at an earlier age
If I have kids, I would strongly advise them to invest their money from high-school summer jobs in index funds and just let the money compound forever

And finally, Freedom 45 provided this one as an important mistake to keep in mind - “Entering a Trade without a Plan.” Thank you for your input.

There have been a number of other people who have been tagged to provide their choice for the top 3 mistakes. Please be sure to check each individual post out at the author’s site to see who else they have tagged and to follow the discussion through the blogosphere!