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Benefits resources: Five common investment mistakes to watch for from TIAA

Oct 20, 2016

Learning about common investment mistakes helps you know what to watch out for. Don't fall prey to:

1. Trying to time the market. A 2014 report from financial research firm DALBAR, Inc., found that individuals who buy and sell stocks on their own often generate lower returns than if they had just purchased and held a Standard & Poor's 500 Index Fund. Dalbar attributes this to investors inadvertently selling low and buying high as they try to predict future market behavior rather than riding out the ups and downs for a longer term. 

2. Making emotional decisions. Financial markets can soar one day and drop the next. If this seesaw makes you nervous enough to change investment choices often, you could end up managing your money too conservatively. On the other hand, buying a stock hastily for fear of "missing out" without researching it thoroughly could cost you. Do your homework before reacting to market changes.

3. Ignoring tax consequences. Taxes can take a big bite out of your investments - both now and during retirement. Know your tax bracket and how taxes may affect your total return now and later.

4. Holding losers too long. Mistakes happen; How you recover is what counts. Consider avoiding holding onto a losing investment, even if it has to be sold at a loss. A better strategy might be to decide in advance at what point you'll throw in the towel if it's underperforming.

5. Not getting help if you need it. Managing your financial future is complex. Find an advisor you feel comfortable with so you can ask your questions and make informed decisions.

A TIAA advisor can help guide you in making informed decisions so you can avoid these common mistakes.
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