Investment Planning Mistakes Financial Advisors Can Help You Avoid

By Teresa Conley | December 10, 2017

When it comes to investing, no one knows it all... and if someone says they do, they're exaggerating. While every investor makes mistakes every now and then, letting things slide too much — or sticking your head in the sand for too long — can have negative impact on your portfolio. 

Teresa Conley is a CFP, Certified Financial Planner and a 401(k) Financial Advisor with Premier Financial Group in Eureka Humboldt CountyWealth management and the financial planning process are definitely not situations in which you want to remain blissfully ignorant. Savvy investors know the importance of always educating

yourself, but who has the time to research everything? (That's where the help of a trusted wealth advisor really comes in handy.)

Here are 5 of the most common wealth management mistakes that investors make... and how to avoid them. 


Stock Picking and Market Timing: Not Effective Financial Strategies

Given the financial media's — and unfortunately, some investment professionals' — tendency toward hyping the "next big stock," it's easy to understand why many investors get caught up in chasing a particular stock or a rapidly growing industry. However, chasing yield shouldn't be a part of your financial plan, as it opens you up to unnecessary risk and doesn't always or consistently result in higher returns. 

Letting Emotions Override Your Investment PlanningTeresa Conley is a CFP, Certified Financial Planner and a 401(k) Financial Advisor with Premier Financial Group in Eureka Humboldt County

When the market hits a peak or a valley, it's easy to let your emotions get the best of you. But attempts to beat the market historically result in lower returns than a long-term, passive investment strategy. Instead of reacting to ups and downs, take a deep breath and stick with your comprehensive financial plan. 

Basing Personal Wealth Management Decisions on Past Performance

You've likely heard the motto buy low, sell high before... but is the market really high, given the long-term perspective? You may also hear that if the market's up, that means it's time to sell and get out before it takes an inevitable dive. The data doesn't bear this conclusion out, because when it comes to the markets, history doesn't necessarily repeat itself. Don't base current decisions on the past, as assets in all classes behave randomly. In our opinion, you are better off buying the whole market via a broadly diversified portfolio. 

Teresa Conley is a CFP Certified Financial Planner and Financial Advisor with Premier Financial Group in Eureka Humboldt CountyNot Asking Your Investment Professional the Right Questions

When you're working with an investment professional, asking the right questions is imperative. After all, it's your financial future at stake. To start, you need to know:

  • How your financial advisor is compensated. Are they paid through commissions or are you working with a fee-only advisor (our recommendation)?
  • What fees and expenses are associated with your investment products.
  • What type of education, training and professional certifications your financial advisor has

Not Working with a Retirement Plan Fiduciary

Many Americans aren't prepared for retirement, but leaving it up to Social Security isn't a good idea. Realistically, those Social Security payments will cover about 10 to 30 percent of living expenses. And though you may assume that you'll be in a lower tax bracket once you retire, that might not be the case. Even worse? Leaving retirement up to chance. Working with a retirement plan fiduciary will give you peace of mind and a goal-based plan.

Though everyone makes mistakes, these common blunders have one thing in common: They're avoidable. Working with a trusted wealth advisor will help you stay away from these investment pitfalls. 




Posted in Financial Planning, Investment Guidance