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Pitfall #1

Lack of a Diversified Strategy

One of the most common investing mistakes is the lack of a diversified, asset allocation strategy. Without a proper plan for allocating their assets, many investors end up with portfolios of investments that are concentrated in certain asset classes, which can increase the risk and volatility in their portfolio and can detract from portfolio performance.

Diversifying your assets across and within a variety of asset classes and avoiding timing the market can help to lower your portfolio’s risk. Although it may seem counterintuitive to put money towards asset classes that may, at certain periods in time, be experiencing negative returns, this year’s negative performers may be next year’s best-performing asset classes.



Pitfall #2—Short-term Time Horizons ►