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Ten Investment Mistakes to Avoid in the C oming
In no particular order.
10 - Betting the ranch on equities - Keep some cash in reserve to take advantage of the next
9 - Betting the ranch on bonds - Bonds are far from cheap right now. When interest rates start
to rise (the only way they can go is up) bond yields will increase and prices will suffer.
8 - Betting the ranch on the US - Or any one country for that matter, including the UK, France or
Poland. However America is a particular case and even if it gets back to full speed, given it's size
it is unlikely to be the fastest or most nimble.
7 - Not owning gold - While it's price can be volatile, at the end of the day gold can't go
6 - Ignoring politics - Light touch is now swinging all the way to heavy touch.
5 - Trusting the government - The flip side of the previous point. Don't assume that the people
running government economic policy know what they are doing. Exhibit A - potential discussions
in the US regarding converting retirement savings accounts, and requiring that only U.S.
Treasuries could be bought through them.
4 - Gearing up - If your investments are down, under no circumstances borrow more to try get
back to even. Excessive debt is the main reason that we are where we are in the first place.
3 - Making judgments based on fear - Either fear of missing out or the fear of doing anything
(investment paral ysis). The former can result in you not having the capital available to take
advantage of market downturns. The latter can see you miss out on buying opportunities.
Remember the 70's, not exactly a bed of investment roses. However, look at the companies that
came out of that era: Microsoft, Apple, Intel etc.
2 - Following the herd - If it is on the front page of the Sun or Gazeta Wyborcza, it's too late.
1 - Assuming the worst is behind us - It probably isn't, there is still a lot of bad news out there.
So make sure you consider investments that can profit in down markets as well as up ones.
The views expressed here are my own. They are not necessarily shared by AES International.
They are subject to change at any time based on market and other conditions. This is not an offer
or solicitation for the purchase or sale of any security and should not be construed as such.
References to specific securities are for illustrative or informational purposes only and are not
intended to be, and should not be interpreted as, recommendations to purchase or sell such
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