Not mastering the basics of investing. Under capitalism, it is understandable why historically stocks (ownership) have outperformed bonds (lending) over most long timeframes. Since asset allocation determines the majority of long-term returns it is one key area demanding focus. 

Not having enough cash or access to it. We call this liquidity. If investors have sufficient cash to fund their needs for the next six months (or longer if you prefer), then the daily and inevitable ups and downs of the markets can be overlooked. This affords the opportunity to concentrate on the more critical element of long-term asset allocation.

Failing to rebalance. Given a long-term allocation to cash, bonds, stocks and perhaps other categories, if your strategy remains appropriate, then sell what has risen and become too high a percentage in the portfolio and buy what is out of favor. At a minimum, this strategy of buying low and selling high should happen once/year. This simple rebalancing move can both improve returns and lower risk through time.

“All investments involve risk, losses may exceed the amount of principal invested, and past

performance does not guarantee future results. This material is intended for informational purposes only and does not constitute specific legal, tax, or other professional advice.”