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ProActiveFinancialPlanning.com |
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The Financial Planning Center Comprehensive Financial Planning
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How to Manage Your Investment Risk |
Common Investment Mistakes or Poor Investment Decisions?
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Common Investment Mistakes or Poor Investment Decisions? Diversification vs. Asset Allocation-Managing Investment Risk Hope for the Best but Plan for the Worst Summary |
The expression, “Don’t put all your eggs in one basket” has never hit home harder than the present. Enron, Worldcom, Lucent, Qwest, Cisco, Sun Microsystems, Intel, Oracle, Tyco, and many other behemoths have lost an incredible amount of value in a very short period of time. Investors who developed large concentrations in these companies and believed they were immune from any significant market declines have received a big dose of reality. The financial losses incurred by those investors were so severe they may never recover. This is an unnecessary risk easily avoided. Review your current holdings. If any single investment became worthless while all your other investments stayed constant, would this loss be too much to bear? If so, this may be a concentrated position. In order to reduce this risk, diversify among other investments. Employees with retirement plans that allow the purchase of their company's stock tend to be serious violators of concentrated positions. This module is available by email in a seven-page, printable version upon request. Contact ProActive Financial Planning to Request. |
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If You Desire More Time to Pursue Life's Pleasures, Find Out How a Certified Financial Planner Can Help.
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