Successful Investing – Helping Investors Avoid Common Investment Mistakes

The Top Mistakes made by Investors

In my dozen plus years of advising individuals and businesses I have found a number of common mistakes that have derailed even the best laid financial plans. I thought by sharing them I might be able to help others sidestep the pitfalls and the negative impact they can have on your portfolio and long-term financial plans.

1. Failing to establish a time horizon and investing accordingly -

If you have expenses that need to be funded in 3 years or less, you should not be investing the cash for them in the stock market or other risky investments. These monies should be carved out of your investment portfolio (the money earmarked for long-term investing) and invested appropriately in liquid assets such as money market funds or term-certain fixed income offerings. If the money is not going to be needed for 3 years or more, an investment plan should be established based upon specific a time horizon and risk tolerance for these funds.

2. Failing to thoroughly diversify your portfolio -

Many investors know about the concept of diversification and think that by owning different investments, they are diversified. Diversification of an investment portfolio makes good sense on an intuitive level. However, it wasn’t until Harry Markowitz published his model of portfolio selection that this concept became a formalized part of sound investment practice and formed the basis of today’s Modern Portfolio Theory. Beyond this basic concept of diversification, the key to Markowitz’s premise is the revelation that the risk of any investment can be reduced and/or performance increased by forming a portfolio of diverse and non-correlated assets. That is, it is important not just to seek a diversity of asset types, but also to seek assets that have low or near-zero correlations to one another. It’s not about owning different investments; it’s about owning different, non-correlated investments.

3. Letting potential tax implications rule your investment decisions –

Many investors delay selling an investment that has done well regardless of how good or bad the future looks for the holding. Their response is, “I will have to pay taxes if I sell.” By not selling, they set themselves up for not having to pay taxes at all – usually because the investment starts on a decline and their concern switches from “having to pay taxes” to one of “hoping for a turnaround.” Don’t be afraid to take some profits off the table. While taxes are an unpleasant result of investing, I prefer to look at them as a positive sign as it indicates you are making money and your investment plan is working.

4. Buying a stock based upon a “hot tip” -

Too many investors listen to a friend’s advice because he or she always seems to have the next “great” money making idea. They don’t take the time to assess the idea personally and jump in because it’s only a few thousand dollars they are investing. Unfortunately this is not investing – it’s gambling. If you want to gamble, go to Vegas and at least get free drinks, dinner, a show and a room for the risks you are taking. Any investment that is being considered for your portfolio should be thoroughly researched and have passed a comprehensive financial screening scrutiny.

5. Attempting to time the market -

Waiting an extra day, week, or month to try and buy in at the “right price” just doesn’t work. No one can predict the future. If they could they most likely wouldn’t be sharing this knowledge with you for free. Successful investors use time, patience and a disciplined approach to increase the likelihood of maximizing their investment returns – not trying to time the market. If you have done the research and the investment is sound and meets your criteria then buy it, regardless of timing.

6. Failing to regularly reevaluate your investments -

Over time all investment styles, strategies and types fall out of favor. So, like timing the market, it becomes virtually impossible to know what is going to be “hot” in the next bull market and what isn’t. For this reason it is always prudent to stay up-to-date on your investments to insure they are still the same investment that you originally purchased (segment drift and manager changes can be one reason they may have changed). If your investments consist solely of mutual funds then an annual review is a good place to start.

7. Basing investment decisions on emotion -

Maybe the stock market is going through a bad time because of a short-term geo-political or economic event. Stay calm and make an educated, well thought out decisions about what, if anything, to do. Assess whether the event will affect the economy long-term or if it’s just a short-term blip. The best move is often no move at all. If it is a short term incident, many times the smart, prudent investor will make additional investments because the current decline provides them with an excellent buying opportunity. The key to successful investing is to have a disciplined strategy and to stick with it.

8. Cashing out gains and dividends rather than reinvesting -

Once you’ve realized gains or had distributions and dividends paid out, insure they are reinvested back into your portfolio. If you pull out your capital gains, dividends and interest, your money won’t compound as quickly, thereby leaving you with a smaller chunk of change down the line. Letting your investments compound is one of the major tenets of successful investing.

9. Owning too much employer stock -

Many people get over-weighted in employer stock because of options and stock purchase plans made available in today’s competitive compensation packages. While these are great supplements to their annual salary they can put an employee in a position of having too much money invested in their employer’s stock. Additionally, it is quite common for people to invest in “what they know” and what do you know better than the company you work for? To compound the problem many people will add more employer stock to their 401k holdings and individual brokerage accounts. Not only does this create a diversification problem in their portfolio but it also subjects them to excessive single stock risk. A good rule of thumb to follow is to insure that no more than 5-10% of your entire investment portfolio is in any one single stock. If you find yourself in this situation the importance of creating a well thought out reduction strategy cannot be overstated.

10. Following the herd -

The most successful of all investors are moving in the opposite direction of what everyone else is doing. They buy when most are selling and sell when everyone else is buying. By following this simple plan you can preserve your capital and potentially sidestep the next bubble (can anyone remember real estate, internet stocks, and technology growth funds?).

11. Not investing at all –

Somehow in today’s society that Mocha Cappuccino Latte seems to take precedence over saving for the long-term. We are a society who wishes to satisfy the “here and now” rather than the securing our future. The important fact here is that those two are not mutually exclusive. In fact, BALANCE is the key in any long-term endeavor, but by always keeping an eye on the end goal you can make sure it is not out of mind while satiating the here and now.

12. Investing without a plan -

Investing without a plan and lacking the discipline to follow it is a sure way to lower your chances of success. The chances of obtaining any long term goal can be greatly enhanced by creating a strategy, following it and regularly reviewing it frequently enough so it reflects any changes that have taken place since implementation. Many investors start off with a small amount of money and start putting it to work without a plan. As time progresses they find they have a mish-mash of investments in their portfolio with no clear strategy or direction. It’s never too early to invest but it’s even better to invest early with a plan.

13. Taking too little risk -

Some people don’t want to take any risk and cannot stand the volatility involved with risky investments. While it may seem like you are keeping your money safe and secure by not taking risk, it is more than likely you are not because of inflation. If your time horizon is greater than 5 years it is recommended that you have no less than 25-30% in growth investments (i.e. stocks) in your portfolio to ward off the effects of inflation. The actual percentage to own is dependent upon many factors including but not limited to age, time horizon before money is needed, current financial situation, etc. A good general rule of thumb to use as a starting point for the percentage of equity you may include in your portfolio is “120 – your age.”

All About Online Shopping

Identification

The process of online shopping is really easy. It allows people to shop for products and services from the comfort of their own home with the help of a computer and internet connection. A person can visit an online retailer and purchase an item with their credit card. The products or services are then delivered to the address that was provided. With a growth of 33% in 2005, online shopping is continuing to gain popularity all over the world.

Benefits

There are a number of benefits attached to online shopping. The most important advantage is that of convenience. Customers can buy whatever they want during breaks at work or while they are at home without going into crowded malls. Online shopping allows people to shop at any time of the day. One can also book mark a page and come back when they think that the time is right without feeling rushed.

Warning

Always make sure that you are shopping on websites that are legit. You can do so by looking up their names in the Better Business Bureau database. Be careful of phishing. Make sure that the website is secure by ensuring that the address starts with ‘https’. Only give out information about your credit card once you are sure that it is secure. Try and use a credit card as opposed to a debit card or checking account as it is easier to have the theft stopped as compared to the other two alternatives.

Considerations

Don’t get carried away with the cheap rates that you are getting online, as they may pad up process in the shipping. So, be careful and ensure that you double check the shipping rates and compare them with postal rates from UPS, Unites States Postal Service or FedEx. Also, make sure that you do not over pay your shipping charges and look for other details like cancellations, return policy etc. Make sure that you have the contact information of the online retailer in case you have any questions or want to track your shipment.

Types

Today, you can buy absolutely anything online. People buy groceries, food products, medicines and even herbal remedies. The most popularly bought products online are books. According to an online article by Nielsen in January 2008, 41 % of internet users bought books online. Clothing, DVDs, electronics, games and tickets are a few other things that are popularly bought through the online medium.

Revolutionizing the Learning Experience With Electronic Interactive Education

What was required?

With an understanding of the value of Kinesthetic Learning, solutions were thought that would assist teaching methods, increase student interaction and improve outcomes across the curriculum.

The productsought needed to be environmentally friendly (ie reduce the use of photocopied materials), user friendly, comprehensive, and not require constant software upgrades.

After a thorough evaluation Di Prust selected Promethean interactive Whiteboards and the Elmo Document Camera from a Melbourne-based ICT company DatacomIT.

The Solution
Promethean Interactive Whiteboard

Promethean's Activboard + 2 is an interactive whiteboard that makes learning fun. Designed by teachers, the Activboard reflects the growing trend in visual learning; The idea that children respond to visual stimulation. After comparisons with other products on the market, Albert Park Primary School trialled the whiteboard over a period of two months and found that teachers were able to develop engaging lessons through Promethean's award winning suite of hardware and software.

The Interactive whiteboard comes with many tools that bring lessons to life. The Activboard, where all content is displayed is available in 95, 78 "and 64" sizes with an adjustable height function. Albert Park Primary School purchased 17 78 "whiteboards in total, positioned at the front and center of the classrooms. Di found students were drawn to the whiteboard and managed to focus on lessons with ease.

The battery free pen known as the Activpen, wrists like a pen but functions as a mouse. It is a supplied tool that initiates all the action; Its use also helps the development of children's handwriting and motor skills, a key factor in Albert Park Primary School's selection of the Promethean product over its competitors.

The interactive software means that teachers can create, save and share lessons. The teachers at Albert Park Primary School appear to be enjoying this aspect of the product, as Di highlights the freedom of the flipchart software: 'the flexibility in using the flipcharts makes lessons more accessible.'

The flipchart is like a blank artist's canvas, where the teacher can create a lesson plan that Picasso would be jealous of 'we are more in control of what we can actually do and are not limited by software.'

This is significant for teaching difficult concepts, as complicated lessons can be simplified and then shared among teachers, furthering the possibility of student understanding.

Di has also recognized a shift in the attitudes of her students who are showing a new enthusiasm to learn. Students at Albert Park Primary School relish in the opportunity to use the whiteboard and the tools it boasts.

With its basic suite consisting of the Activboard, the Activpen and the Activstudio lesson creation software, the Promethean interactive whiteboard creates a vibrant and energetic learning experience. Other tools are the Activote, the Activslate, the Activtablet, the Activpanel and the Activwand.

Albert Park Primary School was suitably impressed by the Whiteboard, along with DatacomIT's vast support and experience in this area.

Such an interactive and innovative product will prove its significance over and over again. It will capture and re-capture students and teachers for years to come.

The ELMO iTech Document Camera / Visual Presenter

The Elmo iTeach Document Camera has seen tremendous success in the classroom environment.

The ELMO was selected by Albert Park Primary School to display lessons on the Interactive Whiteboards. Since its implementation the ELMO has managed to project more than just an image or lesson, but a new method of understanding.

A portable alternative to an overhead projector, the ELMO acts to support lessons with its multimedia and interactive capabilities. It produces a large image that can capture moving pictures at 20 frames per second. The camera is positioned above an A3 sized capture area where you can undertake science experiments, present maps, diagrams and handwritten work to students.

'It's terrific, says Di who believes the ELMO compliments the Promethean Interactive Whiteboard,' I use it regularly. Usually I'll draw something on a sheet of paper and then use the ELMO to project it while I'm still drawing or writing on that same piece. '

Teachers can also connect the ELMO document camera to teaching tools other than interactive whiteboards, such as computers and microscopes. Its numerous interfaces (USB, XGA, Video out) and SD memory card availability, means that teachers can generate lessons for their students at home and can re-use and adapt these lessons for classes in years to come.

With the ELMO product new forms of media can be used to reach students, rather than just old videos, DVDs or CDs. Learning becomes a refreshing experience for both teacher and student.

The interactive nature of the ELMO also increases opportunity for more teacher / student interaction; Communication is becoming a two-way experience, rather than the old one-way model of information exchange from teacher to student.

'The general feedback on the Elmo camera from teachers at Albert Park Primary School is very positive' says Di. Their observations include:

1 Increase in pupil concentration
2 Instructions quickly learned
3 Ability to absorb and retain information
4 By enlarging objects, pupil's understanding is improved and academic curiosity is noticeably increased.

Conclusion
The Promethean Interactive Whiteboard and ELMO iTech Document Camera has positioned Albert Park Primary School at the forefront of leading edge teaching techniques.

More time is spent on the learning process itself, involving Kinesthetic Learning with leading educational technologies. Students are generally more interested in the classes where the Interactive Whiteboard and Document camera are used, and get a real buzz from this real time method of teaching.

Pros and Cons of Watching Television

Many of us love watching TV especially during our free time and if we don’t have anything to do. We like watching TV while eating our favorite snacks or hanging around in a friend’s place. Either way we are entertained when we watch TV. There are many different programs we can watch on TV depending on our mood and our personality. Some love watching comedy and talk shows while others particularly kids and those who are young at heart love watching cartoons on Cartoon Network or Disney channel.

But then, watching TV has its advantages and disadvantages. Experts say that too much watching of TV especially among children is not good for the health and the mind. TV can be entertaining and informative yet at times it can be damaging and harmful.

Below are the Pros and Cons of watching TV.

Pros:

1.) Entertainment and Laughter

We are entertained by shows we love to watch. We laugh at things we find funny and comical in the TV program we are watching. We also love to dance or sing along with celebrities we see on TV and some of us even copy their dance moves and singing styles.

2.) Information and How-To

We learn a lot of information about places and people that we usually don’t learn on magazines, books and newspapers. There are travel shows that show us beautiful places in the world and inform us the culture of different countries which can be a great help especially if we are planning to travel. We also easily learn how to cook new recipes by watching cooking shows and we can learn doing some other stuff through programs that show step-by-step procedures of performing a particular work, exercise or other interesting stuff.

3.) Improve Memory and Easy Learning

We usually take note of the time schedule for our favorite programs especially if it is only shown once or twice a week. We tend to store and recall the things that recently happened in our favorite show before the next episode will be shown on TV. This will help enhance our memory which we can apply on our daily life. For children, it is easier to learn math, science, alphabet and other subject matters if someone can show them how to do it like counting, identifying objects and a lot more. Educational TV shows are available for children to watch and learn.

4.) Bonding With Family and Friends

Watching TV is a great way to bond with family and friends especially on weekends. You can laugh and discuss things that you see on TV. That can be really fun.

5.) Awareness and Alertness

Weather reports and current news on different parts of the worlds can make you aware of what is happening outside your country. You can also be alert when there is an incoming typhoon in your area and that can help you get prepared.

Cons:

1.) Decline in creativity and imagination.

TV shows including commercials have tendency to share their creative works on us and impart their ideas and opinions on us which is not favorable and can lead to a decline in our creativity and imagination since we can not think on our own since creative stuff are readily available and shared to us.

2.) Health problems

We usually eat junk foods or any of our favorite snacks while watching TV. This is not good for our health because we tend to eat a lot while we are sitting down facing the television. This can lead to obesity since we don’t move a lot when we watch TV. This can also lead to other serious ailments caused by eating a lot and moving less.

3.) Makes people lazy

Most of us get hooked when watching programs of our favorite TV channel. We sometimes even forget to do our work or other important things because we got engaged in the show we are watching. Some people forget to do their household chores because they would rather watch TV than work.

4.) Some shows don’t teach good values.

There are TV programs that do not teach good values particularly to children. Instead of teaching them good deeds they even imitate, re-enact or spoof important things happening around us which is not good for children to watch.

To sum up, in watching TV you should choose and monitor the TV programs that you and your children should watch. Choose programs that can help you learn and grow as a person. You should also limit the time your children spend in watching TV. The maximum number of hours small kids should watch TV is 3 hours while for teenagers you should make sure they watch good shows only when they are done with homework and projects.