Not understanding risks Many of us have a simplistic understanding of what risk means and how to apply it to our investment decisions. For example, when compared to the yo-yo motions of the stock market, a bank savings account may seem like a less risky place to put your money. Armed with answers to these questions, you will have a better understanding of risk, and you will be able to match your savings goals to their most appropriate investment vehicles. Virtually all investments today can be purchased without a salesperson. Besides paying unnecessary commissions, the danger in investing through a salesperson is that you're far less likely to be directed to a path that's in your best interests.
Management fees create a real drag on investment returns.
Not surprisingly, higher-fee investments, on average, perform worse than alternatives with lower fees. High ongoing management fees often go toward lavish offices, glossy brochures, and skyscraper salaries or toward propping up small, inefficient operations. Buying after major price increases By the time an investment gets front-page coverage and everyone is talking about its stunning rise, it's time to take a reality check. The higher the value of an investment rises, the greater the danger that it's overpriced. Its next move may be downward.