BOSTON (CBS) – Just for the record, I’ve made my share of money mistakes. No one does it right all the time. Not Warren Buffet nor Peter Lynch. Peter Lynch considered investing success to being right 60% of the time.
So if you do make a mistake, chalk it up to experience and move on vowing never to do it again!
The most common mistake is buying high and selling low. That’s not the way it should be. The grand mantra for investing is buying low and selling high.
Stocks may be a bit pricey right now but I am not concerned about buying stocks. What I am concerned about is selling. If a stock hits a bumpy place or the quarterly numbers don’t look good many investors panic and decide to sell too soon!
Last year when Apple hit a low of $90 many investors pulled out. The sad thing was they had bought at a higher price and now they had a loss. The stock had gone up down for a few months and scared folks. It is now trading at around $156.
If you are going to buy a stock, understand the fundamentals of the company. Do your research. Many companies hit bumps in the road and bounce back from them. Warren Buffet buys a stock and expects to keep it for many years.
Now if you have real clunkers in your portfolio get rid of them.
Review your goals for your money. Long term? Short term? With a short-term goal like one year or so the money should be in cash or cash equivalents. Money you can access immediately.
If it’s for retirement and you are 20 years away, learn to sit tight. If the money is for college and the child is 2 you are okay. And if the money is in a 529 plan, the plan providers will begin to move more of the assets into cash equivalents as the child gets closer to needing the dollars so if the market does tank there’s cash to send the kiddo to college.
You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m. and 3:55 p.m.
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