Magazine article The CPA Journal

Investors Continue to Make Costly Mistakes

Magazine article The CPA Journal

Investors Continue to Make Costly Mistakes

Article excerpt

Investors without long-term financial plans continue to make five common costly errors, according to members of the Zero Alpha Group (www.zeroalphagroup.com), a nationwide network of independent, feeonly investment advisory firms.

* Giving short shrift to U.S. small-cap stocks and growth opportunities by chasing returns in exotic foreign destinations. Because international investments have been "hot" for the last three years, they are now dangerously overloaded in the portfolios of many investors.

* Rushing into real estate, often on a local and undiversified basis, in the same way that investors stampeded into tech stocks in the 1990s. It won't take much of a correction in real estate prices to put investors that are overconcentrated there into a painful bind. Investors that allow real estate to throw their diversification off balance are setting themselves up for a fall.

* Treating "hot" investment alternatives, such as hedge funds or private equity accounts, as though they are asset classes. Though this is a perennial problem for investors without a financial plan that latch on to whatever is being talked up in the media and among colleagues, hedge funds and private equity accounts are in many ways even more volatile and less liquid than the hot products of previous years. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.