Acting on tips among investors' biggest mistakes

The Ticker

August 18, 1999|By Julius Westheimer

WHAT ARE the biggest mistakes investors make? Money magazine, September, lists these errors: Buying before doing research. Listening to tips. Sticking only to fixed-income investments -- CDs, T-bills, bonds, etc. Selling in a panic. Trading too often. Taking fliers on new issues. Losing sight of the long-term picture and becoming paralyzed by indecision.

The top-performing mutual funds for 10 years, through June 30, were OTC Insight, MPT Review, New Issues, Timer Digest, the Chartist and Wilshire 5000 Total Return, according to Hulbert Financial Digest.

Saving for college? The sooner, the better. Starting to invest $100 per month at an 8 percent return when your child is 2 years old produces more than $38,000 by the time your child is 18. But if you delay starting until your child is 10, you must save $285 a month to accumulate $38,000 by the time your son or daughter reaches 18.

"Instead of selling your vastly appreciated stocks," says Tax Hotline, "you might donate them to a charitable remainder trust. You receive a lifetime income for yourself, and perhaps your spouse, and get a big charitable deduction. See your accountant for details."

WALL ST. WATCH: "Regional bank stocks offer good value -- modest price-to-earnings ratios, above-average dividends and a favorable operating environment." (S&P Sector Spotlight)

"Pay a lot of attention to your fund's turnover ratio. Only 20 percent of funds earn back their trading costs and fees -- and still beat the market." (Moneyline, CNN-TV)

"Don't make the mistake of letting your fear of stocks, and lack of fear of bonds, deceive you into a bad asset allocation." (Kenneth Fisher, money manager)

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