Avoid These Eight
Common Mistakes !

By Ian James
Capital Financial Group

Too many investors make the same mistakes! Here are eight to keep in mind:

1.                   Not having enough money on hand for emergencies. No one expects to lose a job or become ill. But it can happen, and the financial repercussions can be l asting. A prudent strategy is to keep enough money in a separate account to cover living expenses for up to six months. Once your emergency plan is in place, you're ready to set up a regular investment plan for your future.

2.                   Delaying the investment process. This can cause real damage to your financial future , because time is a great ally when investing. Even relatively small amounts of money can grow rapidly over time. For instance, if you invested $1 ,200 per year and earned 8% annually, you'd have $4 3,740 in 17 years. Sock away $200 per month at the same rate, and your account would grow to $8 7,481 .

3.                   Keeping too little in stocks . Many people don't have enough of their money invested in stocks. That's unfortunate. While share prices are certainly known to fluctuate , history has shown that they perform well over time. According to Ibbotson Associates, from November 1926 through 2004, compound annual growth rates were as follows:

4.                   Paying too much in taxes. Millions of Americans could cut their tax bill s each year if they t ook the time to consider their choices. Here's how you can cut yours: Contribute as much as possible to your company 401(k) plan. You may be eligible for a tax deduction on the contribution, and your earnings will grow tax­-deferred. Also think about putting money in municipal bonds and annuities. Annuities generate tax-­deferred earnings. ( W ithdrawals of earnings are subject to ordinary income tax. In addition, a federal 10% penalty may apply to withdrawals taken prior to age 59½ and surrender charges usually apply. ) Municipal bond s pay tax‑free interest.

5.                   Buying yesterday's winners. Last year's best investment rarely turns out to be this year's best investment. Don’t buy a security just because it s share price has been rising rapidly in recent months . E valuate its potential for continuing the positive trend.

6.                   Not focusing on fundamentals. Sometimes investors get caught up in the excitement of the market, buying when stocks are high, selling when they are low -- just the reverse of what you need to do. When you buy a stock, you’ re buying a piece of a business. Looking at the fundamentals -- the financial results and management -- of that business can help you buy low and sell high.

7.          U nprepared ness . Many investors purchase a stock believing it will only go up in value. Be prepared for it to go down . If it does, and the underlying business is sound, the decline may be an opportunity to buy additional shares at a more favorable price.

8.          Failing to get professional guidance. Not many individuals have the time and expertise to monitor the financial markets and make investment decisions based on intensive research. The guidance of a full‑time investment professional may increase your profit potential and reduce your risks.

Wachovia Securities is the trade name used by two separate, registered broker-dealers and nonbank affiliates of Wachovia Corporation providing certain retail securities brokerage services: Wachovia Securities, LLC Member, NYSE/SIPC, and Wachovia Securities Financial Network, LLC (WSFN), Member FINRA/SIPC.   The accuracy and completeness of this article are not guaranteed. The opinions expressed are those of the author and are not necessarily those of Wachovia Securities/Wachovia Securities Financial Network or its affiliates. The material is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Provided by courtesy of Ian James of Capital Financial Group , a n investment counselor with Wachovia Securities/Wachovia Securities Financial Network in Central, LA . For more information, please call Ian James at 261-9606 . Wachovia Securities/Wachovia Securities Financial Network, LLC, member FINRA and SIPC, is a separate nonbank affiliate of Wachovia Corporation. ©2008 Wachovia Securities, LLC.

Investments in securities and insurance products: NOT FDIC-INSURED/NOT BANK-GUARANTEED/ MAY LOSE VALUE

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