Common Pitfalls of Investing

Investing is drive by the anxiety to have the money work for us harder. But you need to set a goal (or goals) of what actually you wanted to achive in long run.

Some common mistake investors make, which they may or may not notice, they may put the blame to the wrong topic.

1. No emergency fund before investing
This will cut into the investment portfolio and a forced selling may happen if cash flow is too tight and emergency happened.

2. Time the market
Warren Buffett don't time the market because it doesn't really work well, at least for him.

3. Delaying to start investing
Do you know people has claim "compounding rate" is the 8th wonder of the world ?

4. Taking too much or too little risk
The rate of risk 'feel' by the investor will increase if they understand more on a particular product. But investor tends to 'not feeling the risk' or "feel like it is very low risk" if they don't really understand that product. Diversification is also a way of reducing risk

5. Decision making == Emotion Feeling
Greed and fear drive the decision making. Investor may not even realised it, and the mistake will repeat, but blame is on the market, not themselves.

2010 Resolution

Been quite long didn't update the blog, busy is a very good and publicly accepted excuse :-).

Have you made your new year resolution ? I read an article, where this statement really strike me :There are things that is very urgent but not important, and there are things that is very important but not urgent.

Of course there are another 2 groups, very important and very urgent, and, not important and not urgent.

We tend to put the urgent but not important tasks on top of our to-do list, and the important and not urgent at the end of the list or the never done list ....

Clearing the piled up laundry is urgent but not important. Writing a will is important but not urgent .... which one you have done and which you have not ?