Mistakes to Avoid When Investing

When it comes to your money, the word “mistake” is not something you ever want to hear. But if you’re not that savvy at investment strategies, you could end up hearing that word more than you’d like. If you want to spare yourself the frustration of potentially losing your own money, there are some mistakes you want to avoid when investing.

Incurring Too High of Fees

No matter what you invest in, you have to be aware of which costs are acceptable to pay and which are way too high. Pay close attention to the fees you pay on each of your investments and what they are going towards. Understand whether you are paying a commission or investment management fee. Depending on your unique situation, one may be more advantageous than the other.

Ignoring Inflation

If you ignore inflation and don’t account for the changing values of interests and tax rates, you may end up only earning as much as you would have earned back when you first made the investment. It’s essential to account for inflation costs in order to increase your investment value instead of basically keeping it the same.

Ignoring Tax Consequences

Depending on how and where you hold your assets and investments, you could significantly reduce the amount of taxes you have to pay to the Federal, State, and local governments.

• For example, holding high dividend yield blue-chips in a tax-deferred retirement account may help you keep more of the capital.

Investing in Things You Don’t Understand

If you can’t explain to a friend how your investment works and how it earns you money in a few simple sentences, you should not be making that investment. You can’t be successful in things you don’t understand. If you are dead-set on using a certain investment strategy, employ the help of a professional investment specialist.

*Investing in stocks involves risks, including loss of principle.The information in this blog article is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.

Let American Investment Planners, LLC be your resource. Our financial advisors are ready to sit down and discuss your financial goals for your investments and beyond. To schedule an appointment with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.