Greetings!  

Making mistakes is human. Investors are human. So as investors, we can all make mistakes. Even a savvy investor (such as your financial planner) can slip up once in a while. Thinking back, we're sure you can find an event that makes you cringe. Recalling early withdrawals that were taken from retirement plans, going along with the crowd by investing in the latest dot-com company, or holding out for a higher stock price before selling a concentrated position only to see the price drift downward are some examples of investor's remorse.

Behavioral science studies have shown that the pain of losing is greater than the pleasure of winning. So once you've experienced a painful episode, you might go to great lengths to avoid having it happen again. If you can't remember what your worst investing mistake was, you must not have had a negative experience that was serious enough!

Successful investing comes as a result of learning from your own experience or from those of others. With that in mind, here are some suggestions to avoid making investing mistakes:

• Keep your emotions in check. Market volatility causes many investors to make emotional decisions. As a result, they tend to buy high and sell low, rather than the proven tactic of staying the course with an appropriately allocated portfolio. Successful investing requires patience and stamina. Remember to step back and look at the big picture. Making short-term moves based on the latest news is generally a prescription for failure. 

• Let compounding do the work. Most people understand the importance of saving but do not appreciate the impact of starting now. A 40-year old investor earning 7% would see $100,000 grow to $572,542 in 25 years. If that same investor waits 10 years to get started, he/she would need to invest $200,966 to reach the same amount by age 65. 

• Buy right and sit tight. No one knows when market gains will occur, and missing out on just a few of the market's best days can lower your return substantially. No matter what anyone says, statistics have shown that market timing doesn't work. And the cost of staying out of the market can be much higher than staying invested and taking an occasional hit. 

• Know when to move on. Don't chase investment performance - get out if something is not working. On the flip side, if an investment is working well, make a point to periodically lock in profits if they exceed a certain level instead of being tempted to try to squeeze out a little more by holding those investments longer. 

• Diversification matters. There is no repeatable pattern to investment performance which is why diversification is an investor's best friend. A portfolio customized to your objectives and risk tolerances can help you stay focused on your goals and not get sidetracked by changes in market conditions.

We'd all like to think we can get it right every time - but we're human. Mistakes will happen, but implementing some of the suggestions above will help minimize them. At JBA, we customize portfolios to your individual needs and risk tolerances. We strive to offer you a broader perspective so you can make more informed decisions.