Volume 8 Issue 2007

Your favorite golfer on the PGA Tour typically has scores so low they seem impossible. But suddenly, he begins undershooting greens and misjudging putts and doesn’t even come close to breaking par. He isn’t sure why his game is off, but he knows his fairway flubs could thwart his future goals.

Investing Is a Lot Like Golfing.

No matter how long you’ve been investing, you can still make mistakes that lower your returns and increase your risk. You don’t have to be new to investing to misjudge a shot. Even experienced investors go off course now and then. Learning to recognize some common investing hazards may help you avoid them.

Taking Your Eyes Off the Ball.

Maybe that stock was hot when you bought it, but its current performance and outlook are what count. Holding on to investments that have dropped in value and show no signs of recovering is a mistake many investors make. If that investment is going nowhere, consider selling it and investing the money elsewhere.

Taking a Chip Shot Instead of a Full Swing.

Investing the bulk of your portfolio in securities designed to preserve principal may give you temporary peace of mind, but it puts your savings at risk from inflation down the road. To cushion your risk, think about adding investments, such as stocks, with the potential for earning inflation-beating returns.

Overshooting the Green.

Taking on a lot of investment risk in the hope of getting a big payoff is a strategy that can land you in the water. Instead, choose a diversified asset mix to start you on your way to a winning round!

Diversification does not ensure a profit or protect against loss in a declining market.

Stock investing involves a high degree of risk. Stock prices fluctuate and investors may lose money.