And that’s okay.
There are lessons we could all stand to learn.
This post originally appeared onLearnVest.
Very few people come close to reaching the level of investing wisdom held by the Oracle of Omaha.
After all, even the professionals don’t understand investing all the time, so why should you?
Take these six common blunders that even experienced investors tend to make.
But it’s important to take a step back before taking the plunge.
“But what’s the goal of their portfolio and how do those funds fit in?
Does this make sense?”
In other words, consider asking yourself: Am I seeking growth?
Do I want stability?
Do I want dividends?
What, eventually, do I want to tap this money forretirement or some other savings goal?
Remember: Your whole portfolio should reflect your risk tolerance, goals and timeline.
But, in other ways, they may be inadvertently exposing themselves to more risk than they realize.
to have different levels of risk for different goals like retirement or investing for a home down payment.
In fact,research showsthe U.S. stock market has never lost money over a 20-year period.
Or a friend of a friend insists youmuststart hoarding gold.
“This creates a false emotional aspect in your brain that they know what they’re doing.”
In other words, take that investing advice with a grain of salt.
“More often than not, the hot tips do not work out.
It’s just not worth the risk.”
In some instances, your investment accounts may offer some tax benefits.
However, with investments you hold in brokerage accounts, you’ve got capital gains taxes to think about.
Or did it, for the most part, nullify the benefits of selling?
Illustration byRatch(Shutterstock).
Photos byJacob Edward,Images Money,2,themostinept,Steve Snodgrass, andJames Morris(Flickr).
Want to see your work on Lifehacker?
