Avoid Common Pitfalls

The road to investment success can sometimes be bumpy. Even successful professionals make an occasional mistake when it comes to their investment strategy. While no one can foresee every bump in the road, there are a few mistakes that individual investors may successfully avoid with just a little planning.

Not having a plan

The first bit of planning any investor should undertake is the development of the overall plan itself. Meeting with a financial advisor is the first step in establishing a plan. Together you will assess your current situation, clearly identify your financial goals and objectives and determine your personal risk comfort level. Without a plan, you run the risk of becoming sidetracked, losing sight of your goals or selecting investments that are inappropriate for you.

Not having a backup plan

Planning for the unexpected is another way to keep your investments on track. Keeping an emergency fund of six months worth of expenses in a money market fund can ensure that a job loss will not derail your plans. Having sufficient insurance coverage is another way to plan for unexpected disability or death. Without these backup plans in place, it may become necessary to fall back on the investments you have worked hard to build over time.

Not making the most of your plan

Even if you have a plan, and a backup plan, there is still more you need to do. Monitoring your portfolio and regularly rebalancing your allocations is the best way to help ensure that your assets are working as efficiently as possible. Shifting markets and changing priorities are to be expected. By regularly evaluating any market or product shifts, as well as your changing needs, you can be sure that you are making the most of all of your investment opportunities.

Procrastinating

Formulating an investment plan and staying with it can be hard. Not surprisingly, many people put off making investment decisions because they are afraid of making a wrong choice. But acting sooner rather than later puts time on your side. And the longer you have to invest, the more likely you will attain your goals.

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Securities and investment advisory services are offered through Chase Investment Services Corp. (CISC). CISC, a member of NASD/SIPC, is an affiliate of JPMorgan Chase Bank, N.A.

Source: http://www.chase.com