Filed under: Getting started, Columns, Sun Microsystems (JAVA), Comfort Zone Investing

Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he’ll offer advice to investors who are just getting started.

Investors do their best to increase their wealth. They buy a stock or a bond with the best of intentions, but many of their picks don’t work out. Here are some of the most common mistakes investors make and how to avoid them.

Mistake: Buying a stock on a recommendation from a friend. The assumption here is that the friend did the research and knows about the stock. The richer the friend is, the more weight the tip has. What you don’t know is whether the friend has bought 100 shares or 10,000 shares and how much of his or her wealth is tied up in the stock. The more stock he or she owns, the more they must believe in the stock. You also don’t know how much, if any, research the friend did. Maybe he or she got the tip from another friend, and you’re only one of many in a “tip” chain. Maybe you’re the last one to get the tip.

Continue reading Comfort Zone Investing: Common investing mistakes

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This entry was posted on Saturday, September 15th, 2007 at 3:57 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.