My Biggest Financial Blunder

We all make mistakes, especially in investing. I have and will continue to do so (I am no expert) As one who is constantly trying to improve my returns I make sure that I try my best to learn from these mistakes. It got me to thinking about what types of mistakes investors make. Based on some digging around, and my own gut feel, I think that the top 3 most common mistakes investors make are as follows:

1. Taking stock tips
2. Churning your account
3. Not watching fees

All three of these can have drastic implications on your portfolio. My greatest financial blunder was in reference to #1 – taking stock tips. This was a good 10 years ago and I was speaking to a co-worker of mine and he basically said that he heard from a guy whose brother-in-law knows a priest who spoke with a broker’s wife about a stock called Micro-somthingorother (I for the life of me cannot remember the name) that was going to be bought by Nortel. I turned around and bought about $2000 worth of the shares (remember this was 10 years and to me that was a ton of money). Sure enough the company was not bought and down the stock went. I finally sold my position after losing about $1200. It hurt but I look back on it and I am glad it happened. It made me a better investor and much more pragmatic in my approach. I have not taken a stock tip since.