Ten Common Investment Errors: Stocks, Bonds, & Management

Investment mistakes happen for a multitude of reasons, including the fact that decisions are made under conditions of uncertainty that are irresponsibly downplayed by market gurus and institutional spokespersons. Losing money on an investment may not be the result of a mistake, and not all mistakes result in monetary losses. But errors occur when judgment is unduly influenced by emotions, when the basic principles of investing are misunderstood, and when misconceptions exist about how securities react to varying economic, political, and hysterical circumstances. Avoid these ten common errors to improve your performance:1. Investment decisions should be made within a clearly defined Investment Plan. Investing is a goal-orientated activity that should include considerations of time, risk-tolerance, and future income... think about where you are going before you start moving in what may be the wrong direction. A well thought out plan will not need frequent adjustments. A well-managed plan will not be susceptible to the addition of trendy, speculations.2. The distinction between Asset Allocation and Diversification is often clouded. Asset Allocation is the planned division of the portfolio between Equity and Income securities. Diversification is a risk minimization strategy used to assure that the size of individual portfolio positions does not become excessive in terms of various measurements. Neither are "hedges" against anything or Market Timing devices. Neither can be done with Mutual Funds or within a single Mutual Fund. Both are handled most easily using Cost Basis analysis as defined in the Working Capital Model.3. Investors become bored with their Plan too quickly, change direction too frequently, and make drastic rather than gradual adjustments. Although investing is always referred to as "long term", it is rarely dealt with as such by investors who would be hard pressed to explain simple peak-to-peak analysis. Short-term Market Value movements are routinely compared with various un-portfolio related indices and averages to evaluate performance. There is no index that compares with your portfolio, and calendar divisions have no relationship whatever to market or interest rate cycles. 4. Investors tend to fall in love with securities that rise in price and forget to take profits, particularly when the company was once their employer. It's alarming how often accounting and other professionals refuse to fix these single-issue portfolios. Aside from the love issue, this becomes an unwilling-to-pay-the-taxes problem that often brings the unrealized gain to the Schedule D as a realized loss. Diversification rules, like Mother Nature, must not be messed with.5. Investors often overdose on information, causing a constant state of "analysis paralysis". Such investors are likely to be confused and tend to become hindsightful and indecisive. Neither portends well for the portfolio. Compounding this issue is the inability to distinguish between research and sales materials... quite often the same document. A somewhat narrow focus on information that supports a logical and well-documented investment strategy will be more productive in the long run. But do avoid future predictors.6. Investors are constantly in search of a short cut or gimmick that will provide instant success with minimum effort. Consequently, they initiate a feeding frenzy for every new, product and service that the Institutions produce. Their portfolios become a hodgepodge of Mutual Funds, iShares, Index Funds, Partnerships, Penny Stocks, Hedge Funds, Funds of Funds, Commodities, Options, etc. This obsession with Product underlines how Wall Street has made it impossible for financial professionals to survive without them. Remember: Consumers buy products; Investors select securities.7. Investors just don't understand the nature of Interest Rate Sensitive Securities and can't deal appropriately with changes in Market Value... in either direction. Operationally, the income portion of a portfolio must be looked at separately from the growth portion. A simple assessment of bottom line Market Value for structural and/or directional decision-making is one of the most far-reaching errors that investors make. Fixed Income must not connote Fixed Value and most investors rarely experience the full benefit of this portion of their portfolio.8. Many investors either ignore or discount the cyclical nature of the investment markets and wind up buying the most popular securities/sectors/funds at their highest ever prices. Illogically, they interpret a current trend in such areas as a new dynamic and tend to overdo their involvement. At the same time, they quickly abandon whatever their previous hot spot happened to be, not realizing that they are creating a Buy High, Sell Low cycle all their own.9. Many investment errors will involve some form of unrealistic time horizon, or Apples to Oranges form of performance comparison. Somehow, somewhere, the get rich slowly path to investment success has become overgrown and abandoned. Successful portfolio development is rarely a straight up arrow and comparisons with dissimilar products, commodities, or strategies simply produce detours that speed progress away from original portfolio goals.10. The "cheaper is better" mentality weakens decision making capabilities and leads investors to dangerous assumptions and short cuts that only appear to be effective. Do discount brokers seek "best execution"? Can new issue preferred stocks be purchased without cost? Is a no load fund a freebie? Is a WRAP Account individually managed? When cheap is an investor's primary concern, what he gets will generally be worth the price.Compounding the problems that investors have managing their investment portfolios is the sideshowesque sensationalism that the media brings to the process. Investing has become a competitive event for service providers and investors alike. This development alone will lead many of you to the self-destructive decision making errors that are described above. Investing is a personal project where individual/family goals and objectives must dictate portfolio structure, management strategy, and performance evaluation techniques. Is it difficult to manage a portfolio in an environment that encourages instant gratification, supports all forms of "uncaveated" speculation, and that rewards short term and shortsighted reports, reactions, and achievements? Yup, it sure is.

The first rule of making a personal budget – keep it simple

Rules. No-one likes rules. But we all realize that if we didn’t follow traffic rules and stop at a red light, our streets would be chaos. If you want to have a successful personal budget, you have to follow the rules (in this case one simple rule).Many people believe that there are a lot of rules to follow when making a personal budget. People believe you must work on your budget every day, and keep track of every penny you spend, or else your budget won’t work. Most people think budgets are a lot of work.Most people also believe that budgets are hard. They think you need to be an accountant to be able to create and maintain a personal budget.Budgets can be a lot of work, but they don’t need to be, if you follow the First Rule of Making a Personal Budget: Keep it Simple. Yes, like a lot of things in life, the KISS rule applies to your personal budget.Don’t try to create a complicated series of linked spreadsheets with fancy graphs and tables. Don’t try to master the most complicated personal budgeting software. Don’t believe that you have to go to school and study bookkeeping and accounting to make your budget work for you. Keep it simple.Start with a blank piece of paper, or a blank spreadsheet, and make a list of what you spend money on every month. That’s right, you are not making a budget; you are making a list – how easy is that?Most people can’t even make a list of what they spend each month, because they have no idea what they spend their money on. No problem. Keep it simple. Get a pencil and a piece of paper, and carry them with you everywhere. Whenever you spend money, write in down. At the end of a normal week, you will have a good idea of where you spend your money.You could then take your week’s worth of notes and make a monthly budget. But, to make your budget even simpler, do a separate budget for every pay check, or make a separate column on your spreadsheet for every paycheck. That means if you get paid every week, have a column for every week.Then, make a plan for how you will spend every paycheck. It’s much simpler to decide how to spend your paycheck this week than it is to try to budget for the next six months.Read that sentence again: make a plan for how you will spend your money. That’s the only reason for making a budget. By keeping track of where your money goes, you can make a plan to spend your money where you want to spend it.If you keep it simple, your budget will be a success. And remember, if you don’t follow this simple rule, your personal finances will be a mess, and you could have to declare personal bankruptcy. So keep it simple, because proper budgeting is the best personal bankruptcy alternative.

7 Advanced SEO Tactics - Not the General Fluff

If you're like most online webmasters, then you have probably read one article after the other about search engine optimization. Most of them rehash the same old information and you end up wading through tons of fluff.

However, this isn't one of those articles. Listed below are 7 advanced SEO tips that you won't find on every digital corner.

1. Syndicating Articles that Link to Your Sitemap

As you probably know, syndicating articles is one of the best methods for obtaining one-way backlinks.

They are also valuable pieces of search engine bait because search engine crawlers are frequent visitors to many high-profile article directories. If you want to get the spiders quickly crawling your site, simply submit an informative article to a site like EzineArticles, GoArticles, or ArticleCity.

However, there's another article marketing strategy that isn't mentioned much in marketing circles. This tactic can get the crawlers searching deeper into your site and indexing more of your pages. Simply link to your sitemap within the resource box. This will send the spiders straight to a content buffet where they can quickly slurp up all of your pages.

2. Translating Your Website Into Other Languages

Are you marketing in just one language? If so, you are missing out on 64.8% of your marketing potential. This is because 64.8% of the world is surfing the internet in a language other than English. By becoming a multilingual marketer, you immediately open up a stream of new markets. Google alone crawls web pages in 35 different languages.

One of the best ways to attract worldwide traffic is to translate your site and register it with both English and foreign-language search engines and directories. If you are a seasoned SEO, you'll be happy to hear that the competition in foreign search engines is much less than in those of the United States.

In addition, online foreign language markets are currently growing at a much faster rate than English speaking markets.

You have the opportunity to tap into this market while it's in an exponential growth phase.

3. ROR Sitemaps

As you probably know, sitemaps are important for making sure your site can be completely spidered and indexed by the search engines. Unfortunately, many of these sitemaps are specific to one search engine or another. For this reason, there have been a number of Google and Yahoo site map generators produced in recent years.

However, there is an alternative that is even more exciting. These are ROR sitemaps and they are readable by all search engines, not just by Google or Yahoo.

ROR is an exciting new sitemap tool that uses XML feeds to describe your website. These sitemaps are structured feeds that enable search engines to complement text search with structured information to better interpret the meaning of your site. With a ROR sitemap, search engines can better understand your products, services, images, newsletters, articles, podcasts, and anything else that you want to describe.

For example, if you are selling products, a ROR file enables you to document your product names, descriptions, prices, images, availability, affiliate programs, and any other relevant information. Search engine crawlers like the Googlebot have an enormous job to do. It's time we start helping them to better understand our content.

To start generating your own ROR sitemap, go to Rorweb.com.

4. Keyword Phrases that Convert

Selecting the right keyword phrases is the single most important aspect of any SEO campaign. Unfortunately, many webmasters target the wrong keywords. Too many of us target very general keywords like "real estate" or "internet marketing". Although these terms get lots of visitors, it is unlikely that you will be able to rank highly for them. Then, even if you do, this type of traffic produces very low conversion rates because it does not target prospects.

You will be much more successful, if you target keyword phrases that are 3-4 words long. These terms are much less competitive and have been proven to convert much better than keywords that are 1 to 2 words long.

Who do you think is more likely to buy; someone who goes to Google and searches for "ipod" or someone who searches for "4gb black ipod nano"? Obviously, the person who searches for a more specific phrase is much closer to making a buying decision.

5. GoogSpy

Would you like to get an in-depth view of how your competitors run their business? Well, you can do exactly that with an online service known as GoogSpy. GoogSpy is a free research tool that will tell you what keywords your competitors are bidding on.

This tool tracks over 500,000 keywords every day from Google and then loads this goldmine of information into the GoogSpy.com database. Using this tool, you can browse by company or by search term.

This tool is extremely powerful. Unfortunately, many people take it for granted. This service basically hands you a business strategy on a silver platter. Maybe we should just keep this one to ourselves and enjoy the benefits of being one step ahead of our competition.

For example, let's say you wanted to do some in-depth research on Overstock.com, one of the largest companies online. You would simply go to googspy.com and type in overstock.com. You will then be shown thousands of words that this company bids on. These keywords are proven profit generators. Research like this would normally cost thousands of dollars, but they are providing it free of charge.

If you want to find keywords with high conversion rates, simply type in words such as buy and purchase. You will be shown keyword phrases that are bid on that include the words buy or purchase. These are very lucrative keyword phrases because the person who types in "buy sony playstation 2" knows exactly what they want. They're not just looking around, they are in buying mode. These are the type of keywords you want to bid on. Using GoogSpy, you can uncover these hidden gems in seconds.

Other high-converting keyword phrases include brand names and product names. Type in the keyword "camera" and you will find thousands of different brands and product names for cameras. These keywords are some of the best keywords because of their high conversion rate.

To uncover your own profit-producing keywords, go to http://www.googspy.com.

6. Internal Links Within Content

The navigation of your site is a crucial element of your search engine optimization campaign. Each link within your navigational structure should correlate with a keyphrase that you are trying to rank for.

However, you can also include internal links within your content. For example, let's say you have written an article about online marketing. Within the article are a number of keyword phrases. Some of these phrases include "link popularity" and "web site traffic". If you have other articles within your site that pertain to these topics, then you should definitely link those keyword phrases to those articles. By doing this, you can increase the link popularity of other pages within the same site.

There are very few sites that take advantage of this optimization technique. By doing this, you enable the search engines to find and index much more of your site. These internal links also contribute to a higher ranking because of the anchor text that is used.

Many people only think of inbound links from outside websites when trying to raise their link popularity. However, the internal link structure is also a major ranking factor.

7. Using Your Log Files for SEO

Your server logs reveal very important information about your site. If you learn to use them properly, they can quickly help to maximize your site's traffic and conversion rates.

One of the most valuable pieces of information found in your log files are search phrases. The log files will tell you exactly which keywords people are using to find your website.

Once you have optimized a page, the log files will tell you how people are finding that page and what keywords they are searching for to get there. If you find that people are using keywords that you hadn't thought of to get to a certain page, it would probably be in your best interest to further optimize that page for those keywords.

You might also want to create a new page optimized for that particular term. This is especially true if a new page would enable you to serve better information on the phrase being searched for.

In addition, by looking at how your site is found organically, you can determine whether the same keyword phrases belong in your paid search campaigns. Only choose the ones that are highly relevant. You will find that these keyword phrases have the best conversion rate.