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7 Biggest Mistakes Investors Make

OK – so back to your $3,000 portfolio. In this case, you’d be OK with no
more than four stocks making up the entire portfolio. There’s a simple
reason for this: You’re a busy person. You can’t keep up with news,
earnings reports and other developments about a whole slew of stocks. No
one can. Mutual funds have paid research staffs – people who get money in
exchange for spending their weekdays researching every last detail about a
company and its stock. No one pays you to chase down these details, do
they? And you’re probably not really inclined to spend your off-hours
making lists of when earnings reports are due, how your company’s
industry is faring and how its competition is doing, how global
macroeconomic developments are affecting the company and its industry –
you get the idea.
So keep it simple. By limiting yourself to just a handful of individual
stocks, you can easily have some key facts at your fingertips, such as the
date that earnings are reported. And for those of you with a life outside of
stock investing, you could set an alarm on your computer or phone or
PDA, so you know when it’s time to check your stock, and make a decision
about holding, selling or buying when the quarterly earnings report rolls
around.
Of course, there are also services that offer you
sample portfolios and reminders of when an
individual stock should be sold, or whether
holding or buying more shares would be the best
move. Simple Growth Investing offers that
service. You can check it out here.
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However you decide to manage your portfolio, you’ll do best by keeping it
simple. No big downside surprises when you forgot about an earnings
announcement, or when a stock heads south because of poor news about
its industry. By holding only a few stocks at a time, it’s much easier to keep
up with developments that could have a big effect on the price.
14
Seven Biggest Mistakes Investors Make
 
 
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