Common Investment Mistakes: Part 2

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Investment,Mistakes,Performance

Let’s unpack mistakes 11 to 20. Not knowing your performance Often, investors don’t actually know the performance of their investments. Review your returns to see if you are meeting your investment goals, factoring in fees and inflation. Don’t underestimate the importance of something as small as a 1% return.

In my previous article, I dealt with the first 10 common investment mistakes as identified by the CFA Institute. These mistakes are universal and although many of them seem like the obvious thing to do or avoid, we as investors often fall into the trap of many of these 20 mistakes. As I mentioned in my previous article, these comments and USD figures are US-based. I have added more SA centric comments to keep it close to home. ADVERTISEMENT CONTINUE READING BELOW Let’s unpack mistakes 11 to 20.

Not knowing your performance Often, investors don’t actually know the performance of their investments. Review your returns to see if you are meeting your investment goals, factoring in fees and inflation. Don’t underestimate the importance of something as small as a 1% return. A 1% additional return per year on R1 million over 20 years results in the following: Growth in capital is exponential and not a straight line. By getting 3% more return per year, capital growth can be more than double, as can be seen from the figures above when comparing a return of 9% to 12% per yea

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