Ten Common Investment Mistakes (And How to Avoid Them)

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Ten Common Investment Mistakes (And How to Avoid
Them)

• Presented by
• David S. Richmond, CLU, ChFC
• Chairman Chief Investment Officer

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Disclosures

• David Richmond is a licensed Investment Advisor
  Representative in the states of MI, OH, AZ, CO,
  MN
• Licensed to sell securities, annuities,
  insurance
• Affiliated with Sammons Securities Co., LLC,
  member FINRA/SIPC Midland National
• Richmond Brothers Financial Management
  Specialists, Inc. offers securities through
  Sammons Securities Co., LLC, member FINRA/SIPC
• Fee-based investment advisory services offered
  through Sigma Planning Corporation, a registered
  investment advisor

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Disclosures

• Richmond Brothers offers securities through
  Sammons Securities Co., LLC, member FINRA/SIPC.
  The broker/dealer for Midland Nationals variable
  products is Sammons Securities Co. Sammons
  Securities Co. is a registered broker/dealer
  under the Securities Exchange Act of 1934.
  Sammons Securities Co. is an indirect wholly
  owned subsidiary of Sammons Enterprises, Inc., of
  Dallas, Texas, the ultimate parent company of
  Midland National.
• Dave Richmond and Matt Curfman are members of Ed
  Slotts Master Elite IRA Advisor Group

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Disclosures

• This material is provided for general and
  educational purposes only and is not intended as
  tax, legal or investment advice (or for use to
  avoid penalties that may be imposed under U.S.
  Federal tax laws). There will be an opportunity
  to schedule an appointment for an individual
  consultation at the end of this Webinar which may
  result in a recommendation of specific financial
  products that may help you achieve your financial
  goals
• There is no obligation to schedule an appointment
  or purchase a product

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Agenda

• Common Investment Mistakes
• How to avoid them
• Overview
• Q A

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Common Investment Mistakes

• No Strategy
• Inadequate diversification
• Acting on emotions
• Unrealistic expectations
• Paralysis
• Short-term thinking
• Using Unreliable Sources
• Not naming beneficiaries
• Paying too much in commission fees
• Overlooking cash flow

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1. No Strategy

• Make a plan and check to make sure you are on
  track with your plan at least yearly
• Speak with a qualified professional if needed

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2. Inadequate Diversification

• Never put all your eggs in one basket
• Divide funds between different asset classes
• Try to keep number of different funds between 8
  and 15 for manageability
• Let advisors know about your investments
  elsewhere for proper diversification

Diversification does not ensure a profit or
guarantee against loss it is a method used to
help manage risk
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3. Acting on Emotions

• Investors often sell the winners and hold the
  losers
• Remember how difficult it is to find a winning
  stock
• Be greedy when others are fearful and fearful
  when others are greedy. Warren Buffett

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4. Unrealistic Expectations

• Stock market averages were 10 in the last 80
  years
• SP 500 Index has returned -0.65 in the last 10
  years
• Be realist when planning for the long term
• Plan for 6 returns in retirement
• (rate of return is for illustrative purposes only
  and is not indicative of your particular
  situation your results will vary)

Source http//www.usatoday.com/money/perfi/column
ist/krantz/2007-01-24-stocks-avg-return_x.htm
It is not possible to invest directly in an
index. Past market performance is no guarantee of
future investment performance or success.
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5. Paralysis

• Definition a state of helpless stoppage,
  inactivity or inability to act
• Remember Change is constant
• Dont let change cause inability to act
• Be willing to adjust your plan to accommodate
  changing environment

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6. Short Term Thinking

• Dont buy a stock for 3 or 6 months
• Unless it is a trade based upon an event
• Buy stock for several years
• Never turn an investment into a trade

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7. Using Unreliable Sources

• People think they know more than they do
• Make sure to check a source out before taking a
  tip
• Always remember that something that is good for
  one person may not be good for your situation

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8. Overlooking Cash Flow

• Many dont understand the concept of cash flow
• Make money with
• Appreciation
• Very difficult to generate
• Income/Cash flow/Interest/Dividends
• Helps ensure portfolio stability

It is not possible to invest directly in an
index. Past market performance is no guarantee of
future investment performance or success.
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9. Not Naming Beneficiaries

• Make sure to list beneficiaries on all IRAs, Roth
  IRAs, SEP IRAs, 401(k)s, 457, TSA plans, etc.
• Wills dont cover your IRAs, retirement plans
• Review your designated beneficiaries often (at
  least once a year after life transitions) and
  use them as part of overall plan
• Name trust, individual or charity
• May save you and your heirs on taxes

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10. Paying Too Much In Commission Fees

• Aim to pay no more than 2 per trade in
  commissions
• If you invest 40,000 you dont want to pay more
  than 700 on the trade
• (Commission/Investment) Fee
• Move to a broker that charges less per trade
• OR put more money into the investment

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Overview

• Many things that investors mistakenly do
• Make sure to do your research before investing
  and/or consult with a professional to help ensure
  mistakes are avoided

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Questions

• We welcome your questions at this time
• REMINDER
• type in a question in the Questions pane and
  click send to submit it to Richmond Brothers

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Thank You
For more information www.richmondbrothers.com