The Costliest Mistake Investors Must Avoid in 2020

There are numerous ways investors can lose their hard-earned money in the stock market.

• performance chasing
• buying yield traps whose dividends are unsustainable and likely to be cut, possibly several times
• grossly overpaying for quality companies to the extent that even if they grow as expected you might see negative returns for years or even decades
• ignoring deteriorating fundamentals (thesis breaks about 20% of the time even if you perform proper due diligence)

But of all the potential mistakes that stand in the way of achieving your financial goals, one, in particular, is most likely to cost you a fortune in 2020.

Stock News | 1/10/2020

The Asset Allocator: Dalbar's Investor Panic-Relief Tool (Podcast)

The Asset Allocator: Dalbar's Investor Panic-Relief Tool (Podcast)
Description: For a quarter of a century, Dalbar has highlighted the problem of poor investor performance, fueled by return-chasing and panic selling; now it is offering a practical solution it calls I-PRT (Investor Panic Relief Tool). This podcast (7:15) explains that Dalbar’s solution is not to prepare investors ahead of time with education that doesn’t work, but rather to prepare the advisor ahead of time with a tool that could tilt the scales of the “fight or flight” reaction toward “fight.”

Seeking Alpha | 12/3/2019

Avoiding the Cost of Panic

Investors lose massive amounts due to panic selling in down markets. More can be done about this perennial problem.

This article identifies one critical action that can be taken to stem panic-driven losses. That action is based on a full understanding of the timing, cause and prudent use of financial instruments that can avoid much of the loss.

Advisor Perspectives | 12/2/2019