- Not knowing or deviating from your risk tolerance
Not understanding if the investment is aggressive or conservative, whether you are aggressive or conservative. Being too risky when markets are rising and too conservative when markets are retreating.
- An unrealistic time frame
Gains with investing are developed over time. Setting a reasonable return over several years builds wealth. Trying to follow the latest trend or a concentrated position for a quick profit generally has a negative outcome.
- Lack of asset diversification
Holding several investments in diverse industries and sectors of business will provide a broad distribution that can reduce the risk of loss.
- No emergency fund
Having to liquidate investments that have not reached maturity or the anticipated time frame for holding to generate cash for those unexpected occurrences.
- Lack of planning for health care issues and cost
High cost of health insurance coverage. High percentage of retirees needing long term care. Adapting your home to age in place.
- Poor planning for rising Inflation
Inflation can double your cost of living every 21 years.
