Here's a list of six investing pitfalls from Vanguard as well as links to Free Money Finance posts that discuss each of these issues:
- Investing without a plan. Five Keys to Investing Success, Key #2: Set Exciting Goals
- Underestimating the impact of fees and taxes. Costs Matter If You Want to Maximize Investment Returns; 10 Rules for Building Wealth, Part 10: Defer Taxes; 10 Rules for Building Wealth, Part 8: Hold Down Fees
- Selecting investments before asset allocation. Why Asset Allocation is Important and Market Timing Doesn't Work; Using the Eighty/Twenty Rule for Asset Allocation
- Chasing performance. 10 Rules for Building Wealth, Part 5: Don't Chase Trends; Past Performance Does Not Predict Future Performance
- Trying to time the market. Market Timing is a Fool's Game
- Not rebalancing your portfolio. When to Rebalance and How to Rebalance Your Investment Portfolio; What is Investment Rebalancing and Why You Need to Do It
Hard to beat this list. In fact, it's hard to beat most things from Vanguard in my book. They're usually as on-target as an investment company gets.
So what does all this mean for an investor? For me it means index funds.
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