REPOST: 5 Common Investment Mistakes You Don't Want to Make

Investments mistakes are costly and can’t be readily recouped, so it’s natural to be wary. But then again, being too cautious and conservative is a mistake in itself. Forbes.com contributor Erik Carter outlines the many key mistakes committed by investors and how to avoid them.

You may have made a resolution to save more this year but how should you invest your savings for long term goals like retirement or education expenses? It’s one of the most common questions we get. Let’s start by looking at what NOT to do. Here are some of the most common investment mistakes I routinely see people making:

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1)      Being recklessly conservative

It may seem safe to leave your money in cash or a stable value fund that won’t lose money. However, there are two kinds of risks that you’re actually taking. One is that your money won’t grow enough to keep pace with inflation. If you earn 2% a year and inflation runs 3% a year, you’re actually losing 1% a year in real terms. Your account balance may look bigger but you won’t be able to buy as much with it.

The second risk is that you won’t have enough money to retire on. If you’re going to be ultra-conservative with your investing, be sure to use an appropriate rate of return (like 1-3% depending on how much you’re earning) in any retirement calculations you do. That way you can see if you can afford to save enough to still retire with your ultra-conservative portfolio. If not, you may want to take a little more risk.

2)      Having too much in one stock

This may be the result of having your employer’s stock as part of your compensation or retirement account. Another possibility is that you may have received a gift or inheritance of stock that you’ve been reluctant to sell whether for sentimental reasons, because you don’t want to pay the taxes, or because you just don’t know what to do with it. Well, as the saying goes, don’t put all your eggs (or even more than just 10-15% of your portfolio) in one basket, especially if that basket is also your employer. The last thing you want is to be unemployed and see your nest egg decimated at the same time if something happens to the company.

3)      Chasing past performance

When times are good and the stock market is earning double digits, it’s tempting to want to be more aggressive. On the other hand, when the stock market eventually declines, it can be even more tempting to sell out and stop the bleeding. Investments tend to go in cycles and this will cause you to buy closer to the peak and sell closer to the bottom, which is pretty much the opposite of what you want to do (buy low and sell high).

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The same is true even if you’re choosing between mutual funds that invest in similar things (say US large cap stocks) and move in the same cycle. Common sense would say that you should pick the funds with the best track records. After all, that’s how most things work in our life. We tend to hire and promote the people who’ve done best in the past because they’re more likely to continue doing so in the future. That’s the same reason sports fan obsess over stats.

But the evidence shows that top performing funds are actually less likely to be top-performing funds in the future. Not only is past performance not a guarantee of future performance, it’s not an indicator at all. In fact, you would have been better off picking funds randomly.

4)      Trying to time the market

Instead of looking through the rear-view mirror, what about trying to look forward? I can’t tell you how many people have told me that they’re reluctant to invest in stocks right now because the market is in a bubble or “due for a correction.” Yes, of course the market will eventually have a decline. But no one knows when that will be. It could take years to happen and in the meantime, you’ve lost out on all those returns.

Every once in a while, some investment “guru” or even your co-worker in the next cubicle makes a right call. But you know what they say about broken clocks being right twice a day? Make enough predictions and some of them are bound to stick. The reality is that no one has been able to build a long track record of making money by successfully timing the market. What are the chances you’ll be the first?

The two things we know are that the market is unpredictable in the short run but grows in the long run.  (If the market doesn’t grow in the long run, that means the world economy has stopped growing and your 401k will be the least of your problems.) That’s why they say it’s time in the market, not timing the market that matters.

5)      Paying high fees for investment management

It may seem like the best solution at this point is to turn things over to investment experts. The problem is that those experts don’t know how to pick better investments either. That’s true whether the expert is the manager of a mutual fund, the vast majority of which consistently underperform the market as a whole, or an investment adviser picking those same mutual funds. Even the few funds that outperform the market are no more likely to do so In the future.

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Why do so few outperform? The main reason is that the typical actively managed fund charges about 1.4% a year in fees plus another 1-2% in hidden trading costs that come out of your return. An investment adviser may charge another 1% on top. That’s a lot to pay for underperformance when you could have just bought the market in the form of an index fund charging less than a tenth of that.

 So what should you do? Don’t worry, you don’t need to become Warren Buffett or even spend much time learning about and researching investments. Next week, we’ll examine some simple, low-cost ways to choose investments that are appropriate for you.


Douglas Anderson and Wall Street Capital Partners assist companies in accomplishing growth at the fraction of the time. Visit this website for more on the company and its services.

REPOST: Amazon and Google's rumored moves may be ill-advised

The article below debates whether or not Amazon and Google’s rumored new ventures would make sense in the business outlook of both tech behemoths:  

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 Amazon is setting up a retail store in a San Francisco mall for the holidays. The company has confirmed a report from GeekWire on Monday, which said that Amazon will open a "pop-up" store in San Francisco as well as one in Sacramento. The news is the first acknowledgement that Amazon is expanding beyond its online roots.

It’s a day of wild stories in the tech sector, with Amazon (AMZN) reportedly looking to open a huge chain of stores and Google (GOOGL) said to want to compete with Uber in the ride sharing market.

Neither blockbuster story has been confirmed. Amazon isn’t commenting on the report that it might want to take over stores from near-bankrupt RadioShack. And Google is indirectly denying the report it would take on Uber, a company it has backed via its venture capital unit.

But would either move make sense? Both are certainly debatable and full details obviously are not available. There’s a strong case to be made that Amazon should stay away from opening physical stores (Sprint's reported interest in the stores makes much more sense.) And Google probably has enough on its agenda right now, both in its business and with regulatory issues, without trying to bust the taxi business.

Brick-and-mortar Amazon shops

Rumors of Amazon opening stores are nothing new. The company was said to be looking for stores back in 2012 and again, last fall, when it leased office space in midtown Manhattan, though neither story quite panned out. That doesn’t mean it’s a good idea now.

First, Jeff Bezos typically looks for strategies that can scale, meaning businesses that become increasingly profitable as they grow. That was the basis of his original “Everything Store” concept and newer businesses from electronic books to Internet cloud services. Chains of thousands of small retail stores don’t scale – just the opposite. RadioShack is going bankrupt for a reason. Keeping all those stores open is expensive, whether it’s the long-term leasing costs, employees or inventory.

In fact, one hidden key to Amazon’s business model is that it mostly collects money from customers who buy something before it has to pay the suppliers of those items. But physical stores have to stock lots of goods in inventory and wait for a customer to come along.

Just compare the operating cycle of Amazon and a generic retailer, say, RadioShack five years ago when its business was much healthier. Back in 2009, it took RadioShack, on average, 124 days to get paid, as products moved through inventory and into the hands of customers. By contrast, it had to pay its suppliers every 32 days. Other retailers are quicker, but almost all end up paying for goods well before they get cash back from customers.

At Amazon, the cycle is reversed because it can collect orders online before it has to pay for any merchandise. Over the past five years, it has averaged getting paid within 42 days and paying suppliers after 91 days. (All data is from FactSet.)

Surrendering that advantage, which generates capital for operations and reduces financing costs, seems like an excessive price to pay to raise brand awareness or act as a depot for pick-ups and returns, the supposed benefits of a physical store move.

Another rationale for the Amazon store initiative would be to copy Apple (AAPL) and push more of its home-grown products, particularly the failing Fire phone. If this is the case, Amazon investors should be very concerned. The Fire phone didn’t fail because customers couldn’t get their hands on it. It failed because it was a buggy, overpriced product in a crowded market with better choices.

As Bezos has said in the past, Amazon shouldn’t open stores if it doesn’t have a unique offering.
“I get asked this question a lot and the answer is we would love to, but only if we could have a truly differentiated idea,” Bezos told Charlie Rose back in 2012. “If 100 companies are doing something and you’re the 101st, you’re not really bringing any value to society. And typically the business results aren’t very good for something like that anyway, either.”

Finally, with the odds of a national sales tax at a low point, it would make little sense for Amazon to surrender its tax advantage now. Amazon is required under current law to collect sales taxes in states where it has physical offices and operations. A study last year found that customers quickly shifted online purchases away from Amazon in states where it began collecting sales tax. Going national with a chain of retail outlets would subject all Amazon customers to sales tax at a time when customers of other online-only retailers would still be exempt.

An unnecessary distraction

Google taking on Uber by going into the ride-sharing logistics business isn’t nearly as bad an idea. But the timing doesn’t seem right. It’s also important to note that Google already appears to be denying the report, at least on Twitter. “We think you’ll find Uber and Lyft work quite well. We use them all the time,” the company tweeted.

Eventually, when Google’s self-driving cars are ready (and legal) to drive around on their own, there may be some synergies for the company. But there are a couple of reasons why the search giant shouldn’t go there.

First, Google’s venture arm is one of the top investors in Uber. It's close to the company and can observe without putting much at risk -- or risking its previous investments.

Taking on Uber would also be a huge distraction at a time when Google already has several critically important challenges on its plate. The Android mobile operating system has grabbed huge market share, but it's being challenged at the low end by Asian phone makers eschewing Google’s apps and services and at the high end by Apple. Meanwhile, people are increasingly conducting online activity via mobile apps, leaving Google’s hyper-profitable search engine out of the loop.

It's true that Uber already relies on Google’s mapping technology and, coincidentally, is working on its own self-driving car drive effort. But as Google already owns a chunk of Uber via Google Ventures, it may make more sense to wait and let others do the hard work of getting customers and regulators in line.

Douglas Anderson is the CEO of Wall Street Capital Partners, a venture capital and investment firm providing financial literacy and resources to investors seeking to accelerate their business through investments, financings, mergers, acquisitions, and dynamic growth strategies. Click here to discover how you can quickly and economically meet your investment goals through the company’s financial tools and expertise.

REPOST: Five things first-time investors need to know

For those who want to begin their year right by expanding their financial assets, studying investment processes is a suitable starting point. First-time investors will find this article from The Detroit News helpful in their investment preparations:

Image Source: detroitnews.com

Best Buy is a great example of unpredictable stock prices. Its stock surged 244% in 2013, but is on its way down again.

At the beginning of any new year, many people begin to seriously consider investing. This is the year to get their finances in order, especially if rumors of an interest rate increase prove true. But for newcomers to investing, making the decision to move money into a stock can seem intimidating, especially if they’re relying on the advice of friends and family.

By understanding a few tips, new investors can get started with the peace of mind of knowing their investments will grow. Here are five tips designed to get beginners started on their plans to invest.

Speak to an expert: The best first step for any beginning investor is to speak to someone who has spent years studying the market and specializes in it. The right expert is key, since you’ll be entrusting this person with your hard-earned money. Even if the fees are higher for the best financial adviser in town (though typically, annual fees are 1 percent of your total portfolio), it will be well worth it if that adviser has the knowledge to sell before a fund crashes and buy when a stock is on the verge of breaking through. Just be sure that if you do choose to hire a professional, you work with someone who does not earn a commission for unbiased advice.

Diversify: One of the most dangerous things an investor can do is put everything in one place, especially if there is risk involved. Sinking every dollar into your favorite tech company is risky even if you’re sure that stock will continue to dominate for many years. Unexpected occurrences can wipe out years of earnings in a matter of days.

Diversification can not only reduce risk but improve gains when the right mix of investments is grouped together. Many successful stockholders have made their money with a combination of funds.

Buy low, sell high: Experts have noted that in a thriving market, investors tend to boldly choose high-risk stocks, while in a struggling market they flock to low-risk investments. By battling this urge, investors can actually benefit by buying when prices are low and waiting it out as they rise. This isn’t always an easy task, since the market can be unpredictable and even the best experts sometimes get it wrong.

How does an investor know when a stock is at its lowest? When it will increase in value after being at this low? The truth is, there’s no way to know for sure. Best Buy is a great example of the unpredictable nature of stock prices. The once-thriving company seemed to be on the way out when its stock surged 244 percent in 2013. After that brief success, the stock is once again on its way down, with some experts calling it the beginning of the end for the retailer.

Automate: There’s no replacement for a real, human expert, but software can help the aspiring day trader succeed. Tools like Personal Capital and SigFig help investors set up a portfolio and track the results on an ongoing basis. They even provide mobile apps for tracking on the go. These sites will make recommendations and alert users to mistakes they might be making, such as choosing the wrong broker.

One downfall to using these services is that you often must enter information on all of your financial accounts, which can be a problem if there is ever a data breach. These sites promise to implement security to keep fraudsters at bay, but it’s important consumers be proactive in protecting their information with strong passwords and secure computers.

Use the Web: It’s never been easier to become a stockholder, with expert advice from other investors available at the click of a button. Sites like E-Trade offer comprehensive education to investors, and Motley Fool has ongoing articles on the latest stocks to watch (and avoid).

If a new investor wants to put time in, he can easily learn enough about the market to be successful. While this takes time, through a combination of technology, advice from experts and experience, an investor will soon be making decisions based on his own knowledge of the market.

Stephanie Faris writes for GOBankingRates.com, a personal finance news site.

Douglas Anderson is an expert in venture capital and investment banking, currently serving as CEO of Wall Street Capital Partners. Be in the know: get the latest trends and updates in the world of finance and investment through this Facebook page.

REPOST: The Accelerators: How to Attract Investors

Business owners can easily raise capital through the help of wealthy investors. Unfortunately, the competition for investor attention can be tough. The Wall Street Journal provides the following advice from experienced entrepreneurs and venture capitalists on attracting investors:  

Image Source: appster.com.au

Many entrepreneurs find it difficult to navigate the options when it comes to raising capital for their nascent businesses. The competition for investor attention can be fierce.

Twenty-eight percent of business owners who attempted to raise capital last quarter were able to do so from wealthy individual “angel” investors, up from 13% in the second quarter, according to a survey of 2,361 entrepreneurs by Dun & Bradstreet Credibility Corp. and Pepperdine University’s business school that was fielded from July 22 to Aug. 15. Meanwhile, 14% were able to raise venture capital in the third quarter, up from 7% in the year earlier period, the researchers said.

On the Accelerators, a blog on the challenges of starting a business, experienced entrepreneurs and venture capitalists shared tips on attracting investors. Edited excerpts:

Be Confident, Not Needy

Venture investors are well aware of the risks of building billion-dollar companies, much more so than the entrepreneur. Your job is to get them excited about a massive opportunity. Paint the grandest vision for what your business will become. The best thing you can do in a pitch meeting is paint a big vision of something that should seem audacious and even outlandish.

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At the same time, you should try to subtly convey that your deal is going to get done regardless of their investment. Don’t come from a place of need, which we all naturally repel. Create scarcity—let them know that this funding round is closing soon, and that you’re really there to see if you’re the right fit for each other.

Every investor wants to invest in a confident team. Having that certainty helps you walk the line between confident and cocky.

—Jason Nazar, co-founder, Docstoc, Santa Monica, Calif.

Seek Input From a Network

One of the rookie mistakes many first-time entrepreneurs make is to be too guarded about their ideas. Many will actually spend their first $25,000 on patent lawyers without ever fully vetting their product.

The problem is that it’s hard to break through the clutter and get the attention of top investors—they often look only at deals that come in from a credible referral. There’s absolutely nothing more credible than getting an endorsement from a well-known expert who has already put his or her own money into your company.

The only way to create a network like that is by sharing your ideas and seeking input from experts, investors and potential mentors. Most young entrepreneurs overestimate the chances of someone stealing their idea versus the benefits associated with sharing it.

— Scott Weiss, partner at Andreessen Horowitz,
 

Menlo Park, Calif.

Don’t Aim for the Moon

“Valuation sensations”—young entrepreneurs who are worth more than a billion dollars—make great press. 

Like magic, they seem to take ideas out of thin air and turn them into large amounts of money, fast. While, these youthful tycoons pique the imagination, they also distort our understanding of how entrepreneurship works in America.

Image Source: rt.com

The entrepreneurial community and media need to challenge today’s assumption that “real entrepreneurs shoot for the moon and raise big bucks.” Aiming for the moon isn’t how the vast majority of successful entrepreneurs created the bulk of the value in our economy. Let’s also celebrate the entrepreneurs who create value via steady growth and reinvestment of profits.

In the U.S. about five million people every year attempt to become entrepreneurs, according to the Kauffman Foundation. Typically, most funding for startups comes from the founder’s savings, followed by loans on assets such as cars and houses, followed by credit-card debt. But less than 10% of all the funds invested in startups come from outsider equity, Kauffman says.

Venture capitalist Douglas Anderson is skilled in turning financial resources into more profitable assets. Get more tips on business and investing here.

REPOST: China's Stocks Come Back to Life

Although its gains were mostly short-lived and relatively unsubstantial, the Shanghai Composite Index is showing signs of long-term recovery. But because individual traders make up the bulk of the stock trading scene in China, the growth and sustainability of the market will largely anchor on retail investment. Read more about it in the article below:  

Signs are mounting that the recent rally in Chinese stocks isn't a short-term phenomenon. Zuma Press

Image Source: online.wsj.com

Signs are mounting that the recent rally in Chinese stocks—the Shanghai Composite Index has risen for five months in a row—isn't a short-term phenomenon.

After years of poor performance, the benchmark index has advanced 15% this quarter, its biggest quarterly gain since 2009. The rally comes as investors' interest shifts from China's once-hot property sector to stocks.

"China's stock market may be at a turning point," said Jiang Gui, general manager of Shanghai Simpleway Asset Management Co., which manages $100 million in assets.

There have been false starts before. The Shanghai Composite, comprised of yuan-denominated Class A shares, surged 15% in December 2012, creating hopes that the market was coming back to life, but the gains were short-lived. 

This time, with 217,051 new stock accounts opened in the week ending Sept. 19, according to the China Securities Depository and Clearing Corp., the highest level since March 30, 2012, it looks as though investors are willing to give the stock market another chance.

The longevity of the current rally will likely depend on retail investors, since individual traders dominate stock trading in mainland China. 

Eva Zhang, a financial manager in the southwestern city of Chongqing, started buying stocks earlier this year. "I increased my positions in July and August and made money," she said. But Ms. Zhang started to turn cautious on Chinese stocks in mid-September, and has sold part of her holdings since then. 

"I'm getting ready to exit the market once there are signs of an end of the run-up," she said. 

Institutional investors could take a more long-term approach, but China's asset-management industry still plays a relatively small role in a market dominated by retail investors. Yet there are hopes that an influx of foreign funds could help support the next stage of the rally. 

China's domestic stock market has been largely closed off from global capital, but in October a new program connecting the markets in Shanghai and Hong Kong will provide international investors an unprecedented level of access to shares in mainland China. The program, known as Shanghai-Hong Kong Stock Connect, will permit investors in Hong Kong to send as much as 300 billion yuan ($49 billion) into mainland China, allowing mainland investors to buy Hong Kong stocks as well.

The trading link will "allow all, instead of several hundreds of foreign investors to trade A shares. This will enhance the efficiency of the stock market while bringing in unlimited business opportunities for brokers, fund managers and investors," said Yang Xia, head of China equities at UBS Securities. 

Until the advent of Stock Connect, only mainland residents, and foreign institutions that had received purchase quotas from the government, could buy A shares.

The Shanghai Composite has gained nearly 12% so far this year, a sharp turnaround for a market that has performed less well than its global peers since 2010, weighed down by a deteriorating economic outlook. Poorly performing initial public offerings and the availability of better returns in the property market have kept people on the sidelines. 

The benchmark index has yet to fully recover from the turmoil of the global financial crisis in the late 2000s. While other major indexes, such as the Dow Jones Industrial Average and S&P 500 index, have reached record highs this year, the Shanghai Composite closed Tuesday at 2363.87, compared with its 2007 peak of 6000 points. 

The rally in Chinese stocks this quarter comes as the country's real-estate market loses its allure. The government has spent years trying gain control of the upward spiral in home prices, and this year the market has finally started to cool. Housing sales were down 10.9% over the first eight months of the year, compared with the same period in 2013.

The stock gains are being helped "by the soft landing in the real-estate market," said Aaron Boesky, the chief executive of Marco Polo Pure Asset Management in Hong Kong, which manages $75 million of assets. "This is exactly what the government wants and it is exactly what the stock market needs."

Douglas Anderson leads a team of financial experts at Wall Street Capital Partners who help clients make the best decisions to grow their money. Visit this website to learn more about strategic investing, mergers, acquisitions, and the stock market.

REPOST: How Kickstarter Turned Into the Venture Capitalist’s Best Friend

When crowdfunding sites like Kickstarter and Indiegogo started, some people believed that it could pose a threat to venture capital as the primary way for technology startups to raise money. However, professional investors quickly found a way to co-opt the trend. Read how they did it in this article from Bloomberg Businessweek.

Image Source: businessweek.com

It turns out that people who are good at raising money through crowdfunding campaigns are also pretty good at raising money from venture capitalists.

 Hardware projects that have raised at least $100,000 through Kickstarter or Indiegogo have gone on to raise $321 million from venture capitalists, according to a report published on Monday by research firm CB Insights. About 9 percent of the 443 projects that reach the $100,000 threshold on the crowdfunding platforms have raised venture capital, too.

When crowdfunding took off, some people believed the idea could pose a threat to venture capital as the prevailing way for technology startups to raise money. Predictably, professional investors quickly found a way to co-opt the trend. Venture capitalists are smart enough to browse the projects on Kickstarter and conclude that the really popular ideas might turn out to be good businesses. “We consider that an extremely helpful data point about whether the public wants a device,” says Peter Moran, a partner at venture firm DCM. The firm hasn’t made any investments in post-Kickstarter investments, but Moran says his colleagues are increasingly attuned to crowdfunding platforms.

Why didn’t crowdfunding, with its more favorable terms, become the alternative to venture capital? It’s really hard to build a gadget company, even if you’ve had success raising money to do so. Prominent Kickstarter projects like the Pebble smartwatch and Ouya gaming console have been overwhelmed by demand, and so both of these crowdfunding darlings turned to venture capital to help reach the scale needed to satisfy their Kickstarter supporters.

Kickstarter itself—launchpad for more than 80 percent of the most successful hardware campaigns—has no problem with veterans of its platform seeking other forms of funding. “Creators maintain total creative freedom to create on their own terms,” wrote Justin Kazmark, a company spokesman, in an e-mail. “For some that might mean staying independent. For others, it might mean taking their project to a bigger stage or working with others.”

There can be a little more ambivalence coming from people whose favorite Kickstarter companies get gobs of venture capital (or worse yet, sell out to a giant social network). Not everyone who backed Oculus VR, the virtual reality headset, was patting its founders on the back when Facebook (FB) paid $2 billion to buy the company. “I think I would have rather bought a few shares of Oculus rather than my now worthless $300 obsolete VR headset,” donor Carlos Schulte wrote on the original Kickstarter page after the acquisition was announced. The sale, of course, was a windfall for the venture capitalists who had invested $91 million in the company. (Bloomberg LP, the parent of Bloomberg Businessweek, is an investor in Andreessen Horowitz, one of Oculus’s investors.) But there was no additional upside for the crowd that backed the idea in the first place.  

This could change if the federal government ever gets around to putting the long-awaited equity crowdfunding rules into place. It wouldn’t necessarily be a better deal for entrepreneurs raising funds—who can now raise millions while holding onto 100 percent of their companies—but it would potentially be better for would-be investors looking to risk their money on long-shot ideas.

In the meantime, crowdfunding platforms exist as either clever forms of market research or clever ways to separate suckers from their money, depending on your point of view.

Douglas Anderson is the CEO of Wall Street Capital Partners, a venture capital firm that assists clients in the rapid expansion of their business through investments, financings, mergers, acquisitions, and dynamic growth strategies. Read more discussions on business and investment here.

REPOST: These investment mistakes will cost you

Investors tend to put money into what has been effective in the past. This is not a foolproof strategy considering the volatility and the rising-rate environment in the investment arena. The article below lists down frequent investing errors and the ways to improve one’s chances of reaching investment success in a volatile world.

Image Source: www.smh.com.au

If you’re making these investment mistakes, you should be running away… fast. 

Drop everything and run when you come across... 

Feelings of certainty. They invariably come just before big surprises. 

People who claim certainty. It's the most potent way to trick someone. 

Risk-free returns. You'll end up with return-free risk. 

People who have predicted 564 of the last two market crashes. And there are a lot of them. 

Adjusting your risk-tolerance when stocks are either crashing or surging. It's the easiest way to make a financial decision you'll regret. 

Putting 30 years’ worth of savings into something you spent seven minutes researching. You have no right to complain about losing money in an investment you put no effort into understanding. 

Extrapolating the recent past into the future. Things always change. If your forecast doesn't, you're doing it wrong. 

People who aren't willing to change their minds. Including yourself. Especially yourself. 

Feeling smarter after the market goes up. You had nothing to do with it. 

Explanations of what were likely random events. This means almost every market move that takes place in time periods less than one year. 

Having political feelings within ten miles of your investment decisions. This is a common way smart people make dumb decisions with money. 

Spending more time arguing why other investors are wrong than trying to figure out what you're doing wrong. 

Spending the majority of your time in a job you hate in order to make enough money to spend part of your time in a life you don't hate. 

Precision. Finance just doesn't work that way. 

Impatience. It's the fastest way to disappointment. The opposite is <Warren Buffett> (http://www.fool.com.au/2014/07/22/keep-investing-simple/) 

Investments you can't explain to a third grader. If you can't, you probably have no idea what you're getting into. 

Assuming your past investing behaviour isn't indicative of your future behaviour. It's the best guide you have. 

Assuming that the random life experiences you've had provide a complete view of the world. Everyone has their own version of history and it's a tiny reflection of reality. 

Reliance on pensions, inheritances, or the decisions of anyone other than yourself to make it through retirement. Few third parties care about your wellbeing decades from now. 

Assuming investors who wear suits are smarter than you. Being a smart investor has little to do with education or job title and everything to do with behavioural traits. 

Assuming intelligence in one field translates to being a smart investor. I doubt there's any correlation. 

Assuming that bad investments you made were the result of bad luck and good investments you made were all skill. 

Measuring investment fees in basis points instead of dollars. An adviser saying, "My fee is 100 basis points" sounds so much better than, "This will cost you $35,000 per year." 

Feeling entitled to investment returns, a decent job, or predictability. 

Trading on margin. Most people can't handle market volatility without leverage. 

Trading, in general. You're fighting randomness and computers that can solve a trillion problems before you can blink. 

Worrying about things you can't control. Like what the RBA will do next, what the market will do next month, or whether earnings will beat expectations. 

Avoid those, and most everything else should fall into place. 

Investors, you can discover 2 ASX stocks Warren Buffett could love. Simply click here to claim your free copy of The Motley Fool’s new report “Warren Buffett’s Greatest Wisdom—Plus 2 ASX Shares Buffett Could Love.”

Douglas Anderson assists clients in seeking rapid expansion and mitigating risk through investments, financings, mergers, acquisitions and other dynamic financial growth strategies. Go here for more information about Mr. Anderson’s role as the CEO of Wall Street Capital Partners and founder of Diego Pellicer Inc.