Four Investing Mistakes to Avoid in 2012

The ongoing turmoil in world markets has made for a herky-jerky ride this year. What did you learn?

While most professional money managers expect stomach-churning volatility to continue, there’s no reason why you can’t still position your portfolio for safety, income or growth. Here are some mistakes to avoid:

1. Staying Out of the Market.

Sure, the market this year was crazier than selling snowballs to Inuits. But by staying out – and pretending you knew when to come back in – you missed plenty of profit opportunities. The Select Sector Utilities SPDR ETF , for example, offers a nearly 4 percent yield and has returned about 16 percent year to date through December 7.

The FTSE NAREIT Residential Index ETF, which samples real estate securities throughout the U.S., is up about 9 percent year to date with a 3 percent yield. The greater lesson is not that these funds did well – I’m not predicting they will do well in 2012 – but that diversification offers returns in a number of places. The “all in or all out” approach will deprive you of profits and you just can’t know where they will come from.  Read More…

This article has 11 Comments

  1. Rijbewijs halen

    I specifically wonder about the inflation fraud we are having in Europe since we have the euro. It costs us so much money more in a month, it is really one big fraud!

  2. Kori Eekhof

    My YTD is up 18% for the year. I wisely decided to put it in a diverse fund instead of GICs and i am laughing right now

  3. Greg D

    Great lessons. I made 3 out of 4 of those mistakes way too many times to count!

  4. Mathew E

    It’s funny because for me i dont have any of those problems. I just really stink at picking stocks. And i am also hard pressed to cash out way too early due to personal reasons. But i tend to be really good at the market so i think when things settle down i will be on my way.

  5. Taylor B

    These four investing problems for 2012 is no different than it was in 2011, or even for 2013. People always have these problems. And yet no one learns.

  6. Gunner Kasten

    I think the biggest problem for most people when it comes to their money is that they have no control over their spending habits. Always buy, buy, buy! When does one actually save?

  7. Edgar R.

    Actually bonds aren’t necessarily safe. It depends on the underlying company. If you are taking government issued bonds then yes they are safe and very liquid seeing as how it is backed by the Canadian people.

  8. Titus

    Trying to time the market is the worst mistake from what i’ve witnessed. It can never be done.

    Another is trying to hold way too long on a growth stock.

  9. Jamaal Wellman

    I’ve been getting my two children to start investing. They are 18 and 19 and so far they are enjoying the experience. I wish i had parents that taught me these valuable lessons. Here is hoping they grow up to be responsible adults.

  10. Briley H.

    What’s crazy is that if one doesn’t invest the inflation will eat away any money you have. Its not worth putting it in super safe bonds because in the end you lose it all. Better to take a bit of risk and put it in a low MER ETF for 10+ years.

    In the end the market always goes up despite a lot of hiccups along the way.

  11. Gage

    I am 25 and still don’t know much about the market of stock trading. I don’t even have a RRSP yet. Maybe i am too late for this train 🙁

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