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Securities offered through LPL Financial, Member FINRA/SIPC

Common Investor Challenges

Not having a clearly defined objective

Whether building a new house or an investment portfolio, you need to establish a sold foundation. Gaining an in-depth understanding of your unique financial goals is key to this process. Your personal portfolio investment objective will take into account and your risk tolerance and time horizon. Specific strategies can be created to address a single objective or a combination of objectives simultaneously.

Improperly judging risk

In general, the longer the time horizon of your investments, the more risk you can take on. Many investors, fearing even a little amount of risk, focus on only investments that address short-term volatility even though their time horizon may be 20 years or more. The result is a poorly performing portfolio in relation to their investing goals and time horizon.

Being overconfident in a single stock

Relying solely on your intuition or creating attachments to specific stocks or sectors without reading impartial analysis and reports can lead to poor investing decisions. For example, employees of a firm will often make excessively large allocation’s to their employers stock, believing they can better predict the stock price because of their intimate knowledge of their firm. This is not always true, as demonstrated by cases such as Enron.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

Not investing globally

A well-diversified portfolio should include assets with low correlation to each other. Many American investors tend to learn to lean toward domestic securities and avoid global investing opportunities altogether. By investing only in U.S. stocks, you could miss out when foreign stocks perform well.

Being led by your emotions

Every day you hear new theories or speculation about the direction of the stock market from the media, friends, family and coworkers. It can be challenging to sort through differing opinions, filter out the noise and stay focused on your long-term investment goals. Many investors find themselves preoccupied with the fear of investment losses and mistakenly make costly investment decisions.

Paying too much in taxes

Structuring your investments properly by mitigating the effect of taxes on your portfolio can help preserve and ultimately grow more of your investments over time. Not using tax-efficient money managers or strategies