Money & Investing – Banks.com

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It’s the last week of 2009. The Santa Claus rally is beginning, with stock futures pointing to a higher open today. The rally this week is expected to be rather modest, but solid gains are expected for year-end nonetheless. But if you are looking to improve your stock market performance, there are 3 investment mistakes to avoid in the coming year:

1. Getting bad advice: You might think it would be great to get in on the next “hot” investment or stock, but the bottom line is that many people get bad advice from people they know. If your friends and family are telling you about their “hot” stock, the chances are that the time to buy was weeks ago. Getting in now probably means you’re already near the current peak in the cycle. Another consideration is qualification. How much research are these folks doing? While you don’t need to be running to a broker for everything, it is a good idea to do your own research and to consult with a few folks (or read a few blogs) from people who may not have the same mindset that you do.
2. Focusing too much on the short term: Many investors want to see immediate results. Additionally, the reason they are looking for a “hot tip” in the first place is that they want to make it big. Most people, though, don’t make it big on a short-term stock pick. Instead, consider setting up your investment portfolio for the long term. You are more likely to see solid gains and end up with enough, rather than risking too much for short-term gains that may never be realized.
3. Being too conservative: There is a fine line between risking too much and not risking enough. If you want growth to beat inflation, you will need to add a little risk to your investment portfolio. Consider your options, and figure out how you could inject a little more growth into your portfolio. Just make sure you remain balanced a diverse so that you aren’t too exposed.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.