How to Avoid Common Investment Mistakes

Whether you're an expert investor or a beginner like most people, these tips can help you keep your portfolio on track and your mind at peace. Happy Investing!

Difficulty: Moderate

Instructions

1. 

   Don't panic or overreact to market shifts.
   
   These days, the stock markets have been extremely volatile. The worst thing you can do is to react emotionally to these dramatic shifts and try and time the market. Unless you have a lot of time to watch minute-by-minute swings in the stocks in your portfolio, it's best to keep a long-term perspective on your investments. DON'T panic.

2. 

   Maintain a diversified portfolio.
   
   Basically, this means don't put all your eggs in one basket. Having diversified investments (instead of putting all your money into one stock or a single sector) will protect you against radical market swings.

3. 

   Periodically reassess your asset allocation.
   
   Your portfolio should incorporate your particular risk tolerance and financial objectives. So monitor your portfolio periodically so it stays on its targeted asset allocation.