Successful Investing – Helping Investors Avoid Common Investment Mistakes

The Top Mistakes made by InvestorsIn my dozen plus years of advising individuals and businesses I have found a number of common mistakes that have derailed even the best laid financial plans. I thought by sharing them I might be able to help others sidestep the pitfalls and the negative impact they can have on your portfolio and long-term financial plans.1. Failing to establish a time horizon and investing accordingly -If you have expenses that need to be funded in 3 years or less, you should not be investing the cash for them in the stock market or other risky investments. These monies should be carved out of your investment portfolio (the money earmarked for long-term investing) and invested appropriately in liquid assets such as money market funds or term-certain fixed income offerings. If the money is not going to be needed for 3 years or more, an investment plan should be established based upon specific a time horizon and risk tolerance for these funds.2. Failing to thoroughly diversify your portfolio -Many investors know about the concept of diversification and think that by owning different investments, they are diversified. Diversification of an investment portfolio makes good sense on an intuitive level. However, it wasn’t until Harry Markowitz published his model of portfolio selection that this concept became a formalized part of sound investment practice and formed the basis of today’s Modern Portfolio Theory. Beyond this basic concept of diversification, the key to Markowitz’s premise is the revelation that the risk of any investment can be reduced and/or performance increased by forming a portfolio of diverse and non-correlated assets. That is, it is important not just to seek a diversity of asset types, but also to seek assets that have low or near-zero correlations to one another. It’s not about owning different investments; it’s about owning different, non-correlated investments.3. Letting potential tax implications rule your investment decisions – Many investors delay selling an investment that has done well regardless of how good or bad the future looks for the holding. Their response is, “I will have to pay taxes if I sell.” By not selling, they set themselves up for not having to pay taxes at all – usually because the investment starts on a decline and their concern switches from “having to pay taxes” to one of “hoping for a turnaround.” Don’t be afraid to take some profits off the table. While taxes are an unpleasant result of investing, I prefer to look at them as a positive sign as it indicates you are making money and your investment plan is working.4. Buying a stock based upon a “hot tip” -Too many investors listen to a friend’s advice because he or she always seems to have the next “great” money making idea. They don’t take the time to assess the idea personally and jump in because it’s only a few thousand dollars they are investing. Unfortunately this is not investing – it’s gambling. If you want to gamble, go to Vegas and at least get free drinks, dinner, a show and a room for the risks you are taking. Any investment that is being considered for your portfolio should be thoroughly researched and have passed a comprehensive financial screening scrutiny.5. Attempting to time the market -Waiting an extra day, week, or month to try and buy in at the “right price” just doesn’t work. No one can predict the future. If they could they most likely wouldn’t be sharing this knowledge with you for free. Successful investors use time, patience and a disciplined approach to increase the likelihood of maximizing their investment returns – not trying to time the market. If you have done the research and the investment is sound and meets your criteria then buy it, regardless of timing.6. Failing to regularly reevaluate your investments -Over time all investment styles, strategies and types fall out of favor. So, like timing the market, it becomes virtually impossible to know what is going to be “hot” in the next bull market and what isn’t. For this reason it is always prudent to stay up-to-date on your investments to insure they are still the same investment that you originally purchased (segment drift and manager changes can be one reason they may have changed). If your investments consist solely of mutual funds then an annual review is a good place to start.7. Basing investment decisions on emotion -Maybe the stock market is going through a bad time because of a short-term geo-political or economic event. Stay calm and make an educated, well thought out decisions about what, if anything, to do. Assess whether the event will affect the economy long-term or if it’s just a short-term blip. The best move is often no move at all. If it is a short term incident, many times the smart, prudent investor will make additional investments because the current decline provides them with an excellent buying opportunity. The key to successful investing is to have a disciplined strategy and to stick with it.8. Cashing out gains and dividends rather than reinvesting -Once you’ve realized gains or had distributions and dividends paid out, insure they are reinvested back into your portfolio. If you pull out your capital gains, dividends and interest, your money won’t compound as quickly, thereby leaving you with a smaller chunk of change down the line. Letting your investments compound is one of the major tenets of successful investing.9. Owning too much employer stock -Many people get over-weighted in employer stock because of options and stock purchase plans made available in today’s competitive compensation packages. While these are great supplements to their annual salary they can put an employee in a position of having too much money invested in their employer’s stock. Additionally, it is quite common for people to invest in “what they know” and what do you know better than the company you work for? To compound the problem many people will add more employer stock to their 401k holdings and individual brokerage accounts. Not only does this create a diversification problem in their portfolio but it also subjects them to excessive single stock risk. A good rule of thumb to follow is to insure that no more than 5-10% of your entire investment portfolio is in any one single stock. If you find yourself in this situation the importance of creating a well thought out reduction strategy cannot be overstated.10. Following the herd -The most successful of all investors are moving in the opposite direction of what everyone else is doing. They buy when most are selling and sell when everyone else is buying. By following this simple plan you can preserve your capital and potentially sidestep the next bubble (can anyone remember real estate, internet stocks, and technology growth funds?).11. Not investing at all – Somehow in today’s society that Mocha Cappuccino Latte seems to take precedence over saving for the long-term. We are a society who wishes to satisfy the “here and now” rather than the securing our future. The important fact here is that those two are not mutually exclusive. In fact, BALANCE is the key in any long-term endeavor, but by always keeping an eye on the end goal you can make sure it is not out of mind while satiating the here and now.12. Investing without a plan -Investing without a plan and lacking the discipline to follow it is a sure way to lower your chances of success. The chances of obtaining any long term goal can be greatly enhanced by creating a strategy, following it and regularly reviewing it frequently enough so it reflects any changes that have taken place since implementation. Many investors start off with a small amount of money and start putting it to work without a plan. As time progresses they find they have a mish-mash of investments in their portfolio with no clear strategy or direction. It’s never too early to invest but it’s even better to invest early with a plan.13. Taking too little risk -Some people don’t want to take any risk and cannot stand the volatility involved with risky investments. While it may seem like you are keeping your money safe and secure by not taking risk, it is more than likely you are not because of inflation. If your time horizon is greater than 5 years it is recommended that you have no less than 25-30% in growth investments (i.e. stocks) in your portfolio to ward off the effects of inflation. The actual percentage to own is dependent upon many factors including but not limited to age, time horizon before money is needed, current financial situation, etc. A good general rule of thumb to use as a starting point for the percentage of equity you may include in your portfolio is “120 – your age.”

10 Tips For Choosing the Perfect In-Home Health Care Agency

When caring for your aging parent or loved one becomes overwhelming and you need a break, or when extra help is needed with bathing, feeding, dressing, household duties or if caring for them yourself is just not possible anymore, selecting an in-home health care provider is a good alternative.Proper screening is essential to ensure that the person you choose has, not only the skills to provide excellent care, but also the right personality for the job. Consider these tips and hints and you will find that hiring an in-home heath care provider does not have to be stressful.1. Evaluate Your Loved One’s Needs
While some older adults just need assistance with basic living skills, others have additional health care needs that require a special skill set. Therefore, it is necessary to make a list of all of the duties that an in-home health care professional will need to provide so you can narrow down the list of candidates early on. If you are hiring through an agency, give them as much information from the start so they can match you up with someone who possesses all of knowledge and capabilities to give the best care possible to your loved one.
If your home health care worker will be assisting with bathing or dressing, it is important to discuss this with your loved one to make sure that they are comfortable with the gender of the companion. Women or men may become embarrassed when opposite gendered health care workers assist them with personal care and this may cause bath time to become stressful.2. Speak With Local Experts
Before you go to the yellow pages or check out the classifieds for home heath aids, speak with neighbors, doctors, and elder care providers locally who can give you some recommendations and advice. Find out where other families have found in-home help and have them tell you about their experience. An administrator at a local nursing home may also have some suggestions for you on where to locate the best care giver. Support groups are a wealth of information, as well.3. Create a Job Description
When you are ready to begin speaking with applicants and conducting interviews, start by writing a job description. The job duties can serve as talking points for your interview and also give the applicants a clear picture of what will be required of them.4. Prepare Interview Questions
If you are not experienced at conducting formal interviews, you will benefit greatly by having a prepared list of questions. It will help you stay in control of the interview, not miss any key points, and make the best use of your time. Write it all down.5. Outline an Employment Contract
Even if the person you select comes highly recommended and you and your family really hit it off with them, make sure to remain professional. This includes having them sign a contract that outlines your expectations, their duties, as well as boundaries. You can then refer back to the contract should a situation arise in the future. Often Home Health Agencies prepare the contracts themselves. Be sure to read them carefully and add anything that you wish to be included.6. Personally Screen Candidates
Since the person you hire will be spending time alone with your parent or loved one, it is essential that you approve them yourself. Having an agency just send someone over is not acceptable in this situation. Even if they can paint a picture of a candidate’s qualifications, because the job of health care provider is so intimate, personality is equally as important. If your loved one is able to participate in the interview, that is ideal. Regardless, they should spend some time together to make sure that they click.7. Conduct a Background Check
Do not trust your intuition. When you think that you have found the person you want to hire, do conduct a background check to make sure that the person you hire does not have a questionable past.8. Check References
Even if this is their first job in the field of health care, every applicant should be able to provide references. Ideally, these should come from past employers. Otherwise, professors, internship supervisors, and personal references can also be used.9. Protect Your Home and Family
Since the health care provider you hire will most likely have free access to your home, possessions, and family members, find out if they are bonded. It they are not bonded themselves, find out if the agency that you hired them from is. Remember not to leave credit cards, checkbooks and personal papers in unsecured areas.10. Stay Involved
Your job is not over once the contract is signed and employment has begun. The more of a presence you have in your loved one’s life the better. Even if you can not be there in person, scheduling telephone meetings can let the health care provider know that you are involved and on top of things. Ask for progress reports and find out if there are any difficulties. Since the health care provider is around your loved one the most, they can give you the best information about their physical health as well as their state of mind.One way to stay involved is to use a caregiver’s organizer (which we just happen to offer on our website). The Caregiver’s Companion is an organizational tool that has sections for personal information, family history, medications and side effects, medical appointments, and home health care workers notes. I hate selling, but this IS a very good tool in my opinion.

6 Tips and Tricks for Exam Preparation

During academic life, the most stressful period for students is the last few days before their exam. Often students require assistance from a professional and need a formal structure for exam preparation. However, students who lack time management skills face the most difficulties.

For such students, the team of Homework Minutes came up with the top 6 tips and tricks for students to score better grades and enhance their academic performance

1 – Study as Soon as Possible

Every student is recommended to study for their exam as early as possible. Generally, students procrastinate studying because the exams seem like a few months away. But, the earlier students start preparing and studying for the exam, the more they will get more prepared and confident. Hence, enhancing their academic performance.

In addition, learners who tend to wait to study till the last day start feeling overburdened and overwhelmed. But, studying under pressure is not an easy task for students. However, starting early can be extremely beneficial for students. Not only will students be more confident, but they will also boost their grades and academic performance.

The benefits of starting studying early are:

(i) Less stress

(ii) Boost in confidence

(iii) Peace of mind

(iv) Improves grades

2 – Use Flow Charts and Diagrams

According to research, students who use visual elements such as bar graphs and charts score better grades than other students. It is proven that humans have a tendency to retain information from visual elements for longer periods of time than compared to text.

In addition, teachers and professors also use bar charts and diagrams to explain complex concepts in the classroom. Furthermore, using visual elements help the professor to judge the understanding and knowledge of the student. Moreover, if a student can face difficulties in understanding, choosing exam preparation services becomes the best option for learners.

The benefits of using visual elements are as follows:

(i)Longer retaining power

(ii)Easy to learn

(iii) Easy to understand complex concepts

3 – Practice Old Exam Papers

The saying “Practice makes a man perfect” results truly when it comes to exam preparation. Going through the previous years’ exams certainly helps students to understand the key components and patterns of exams.

The earlier students start the better it is for them. In addition, It’s always recommended to complete all the mock tests. These papers will help students to get familiar with the format of the exam.

Often students are well prepared and have great subject knowledge. Yet, they were not able to perform under the pressure, which ends up affecting their academic grades. There are many practice papers available online for students to practice and boost their confidence in their knowledge.

Furthermore, Students can also seek their test papers from their professors. The best way for exam preparation is to seek professional assistance from an expert tutor from Homework Minutes.

The benefits of going through the previous year’s test papers are as follows:

(i)Prepare students for their exams

(ii) Shows important questions

(iii) Students get familiar with the exam format

4 – Take Regular Breaks

Taking a small break at regular intervals has become essential for students to remain motivated and concentrated. Taking breaks is helpful for students since it gives them a feeling of gratification after completing a set goal.

According to research students are recommended to schedule breaks every 60 to 90 minutes for at least 20 minutes. In addition, taking beaks have various benefits such as:

(i) Improve mental health

(ii) Improves the memory

(iii) Serves as an energy boost

(iv) Boosts your performance and creativity

5 – Work on Your Weakness

While practicing and preparing for your upcoming exam, it becomes essential for students to keep their eyes open and acknowledge their weak points. If a student is facing difficulties then it is recommended to practice and overcome where they lack. In addition, after making mistakes, each student should review their errors and blunders. Also, each student should try to understand and learn problem solving skills.

Understanding the methodology to solve the problem and assist students. Furthermore, students can also seek a professional tutor from Homework Minutes where they can get prepared for their exams. Moreover, students should note down their errors and make sure not to repeat them again in the final exams.

6 – Seek For Help Beforehand

Often students have a tendency to troubleshoot problems by themself. But, most students face trouble in understanding the complex concepts of the subject. In case you are also facing the same challenges then hiring an expert for exam preparation is the best choice for them. Clarifying the doubts from the professor or expert help students to understand their doubts

In addition, students are recommended to understand the concept rather than trying to memorize the answers. Taking the correct guidance from a professional can help students remember the concept for a longer time.

And Finally…

To conclude, following the tips and tricks discussed in the Article will definitely help students to boost their academic grades and achieve their desired academic goals. Every subject requires a deep understanding and a strong hold on fundamental concepts. And, in case you are facing any challenges, we highly encourage you to choose online exam preparation from the top expert tutors from Homework Minutes.

To conclude, following the tips and tricks discussed in the Article will definitely help students to boost their academic grades and achieve their desired academic goals. Every subject requires a deep understanding and a strong hold on fundamental concepts. And, in case you are facing any challenges, we highly encourage you to choose online exam preparation from the top expert tutors from Homework Minutes.