Daily Money - Avoid This Common Investing Mistake

September 10, 2021

Psst: Investing is easy. Some people just make it seem hard because they want you to pay them to do it for you. In fact, you can do it yourself with minimal upfront effort and management. The less meddling, the better. A recent study found that, while certain mutual funds and ETFs delivered a 9.4% average annual total return for the past decade, the average investor in these funds got only 7.7% due to poorly timed trading activity. For long-term goals like saving for retirement, it’s best (and easiest) to buy and hold. That’s not to say that you should never consult a professional. Reputable planners are clear on what they can and can’t provide, and they can be a huge help with complicated questions like how to live off your accumulated savings in retirement. But you can start investing on your own — or with friends, like today’s reader of the week!

Best wishes,

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Retire With Money Community News

What are you up to these days?

My husband and I love this city. Now we are still in the same house after almost 40 years, surrounded by young techies. This last year and a half has been virtual everything. I have planned virtual lectures for my women’s book club and my husband Steve has volunteered for NAMI [National Alliance on Mental Illness] as a virtual instructor for families challenged by mental health crises. The pandemic didn’t help!
 
No, it didn’t! What’s your advice on planning for retirement?
 
My advice for retirement is directed towards women. Do not wait for a perfect future time to start investing. I began as a young mom after I joined a Seattle investment club called WHAM (Women Hot After Money). For over 25 years we invested small amounts monthly using the national BetterInvesting tools to evaluate the quality and earnings power of companies. Over time, I added some of these companies to our personal portfolio and they contributed mightily to our retirement security today. We used financial advisors early on in our marriage. One offered reasonable advice but another steered us into complex investments that lost money. It’s one reason I enjoyed learning about investing and gaining confidence in my own choices over the years with the club. Plus, it was fun to be in a club!
 
Our personal investments are individual tech and other well-run companies in different sectors. I have added Vanguard index funds in small cap and international areas for diversification, along with more conservative savings for balance. I like to steer this boat myself without heavy fees or so-called experts recommending complex investments. Know what you own, avoid frequent trading and don’t expect every investment to work out. The ones that do well can be magical for your retirement, if you hang on through the downturns.
 
One of our sons loves crypto! We did buy a VERY small position in Ethereum a few years ago on his advice, but it’s pure speculation. He thinks we are pretty stodgy in our investments, but he may appreciate them someday.
 
Please tell me something (or someone) you’re grateful for.
 
I am grateful for my kind husband, our two tall boys and a new grandson in Denver. We look forward to visiting him later this fall after our booster shots.
 
Bravo to the scientists for the vaccines that have kept so many of us out of trouble. If you don’t have your health then your investments cannot keep you going.

Retirement News From Around The Web

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Here are the factors to consider. CAN I RETIRE YET?

6 Ways to Pass Wealth to Your Heirs
Know the tax implications of each. AARP

Minister for Seniors Confronts Ageism and the Shame It Brings
She’s also struck by how “wildly creative and liberating” aging can be. KAISER HEALTH NEWS

Elizabeth O'Brien is deputy editor at Money. She has covered retirement and health care for nearly a decade. A Brooklyn resident and mom of two boys, she navigates the alphabet soup of Medicare and the New York City subway system with equal ease. You can email her at elizabeth.obrien@money.com and follow her on Twitter at @elizobrien.

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