Mistake #1: Ignoring the possibility of a conflict of interest with your broker/investment adviser
Each investment action involves two distinct activities.
One is providing investment advice, and the other is carrying out the actual
transaction. What's important for you as an investor is having confidence
that there is no conflict of interest in the handling of your account with
respect to these activities.
To avoid such a conflict of interest on any
transaction, it is suggested that a broker/bank be selected to carry out your
transactions. Help in making this selection can be provided if you
desire.
The broker would have custody of your assets, which you would
have access to at any time. Strategic Capital Management would
not share in any commissions on the sale or purchase of securities. You,
meanwhile, would benefit from reduced commissions as a result of block trading,
which minimizes transaction costs.
Strategic Capital Management would have the discretionary
power to trade in your account and is well qualified to carry out the advisory
role for you.
To avoid such a conflict of interest on any transaction, it is suggested that a broker/bank be selected to carry out your transactions. Help in making this selection can be provided if you desire.
The broker would have custody of your assets, which you would have access to at any time. Strategic Capital Management would not share in any commissions on the sale or purchase of securities. You, meanwhile, would benefit from reduced commissions as a result of block trading, which minimizes transaction costs.
Strategic Capital Management would have the discretionary power to trade in your account and is well qualified to carry out the advisory role for you.
Back to topMistake #2: Not realizing how different conditions can affect the market.
A wide variety of factors can have a profound effect
on the business prospects of different companies in the marketplace, thereby
affecting the price of their securities.
Among these are economic
and financial events, weather conditions, scientific developments,
legislative action, court decisions, military matters, international events,
changing policies regarding international trade, medical breakthroughs,
competitive situations, changing trade practices, evolving social patterns and consumer
trends.
Not being aware of the
potential impact of such factors on specific industries or companies can lead
to costly mistakes in buying or selling the securities of these companies.
Among these are economic and financial events, weather conditions, scientific developments, legislative action, court decisions, military matters, international events, changing policies regarding international trade, medical breakthroughs, competitive situations, changing trade practices, evolving social patterns and consumer trends.
Not being aware of the potential impact of such factors on specific industries or companies can lead to costly mistakes in buying or selling the securities of these companies.
Mistake #3: "Fighting the tape" by underestimating the knowledge of others or the market momentum
Contrariness is not always an effective
investment strategy. Underestimating the knowledge of others or the impact of
market momentum does not qualify any investor to "fight the tape" with
success.
At the same time, an advanced knowledge can strike a winning
balance between contrariness and momentum investing.
In order to
succeed as an investor, you must either have the knowledge required to make
intelligent decisions or the time needed to acquire such knowledge. But
if you have better things to do with your life, the counsel of an experienced
investment advisor becomes an option worth considering.
At the same time, an advanced knowledge can strike a winning balance between contrariness and momentum investing.
In order to succeed as an investor, you must either have the knowledge required to make intelligent decisions or the time needed to acquire such knowledge. But if you have better things to do with your life, the counsel of an experienced investment advisor becomes an option worth considering.
Mistake #4: Underestimating the importance of timing and failing to recognize signals
In investing, timing is everything. Knowing
what securities to buy or sell is meaningless without knowing what the best time may
be to make that buy or sale.
With respect to selling, the ability to
recognize "exit" signals is particularly important. Such signals exist for
all securities and may involve one or any combination of the aforementioned
factors.
The need to be able to recognize
these signals is a good reason why the experience of a knowledgeable investment
professional with a day-by-day familiarity with the market is so invaluable to
an individual investor.
With respect to selling, the ability to recognize "exit" signals is particularly important. Such signals exist for all securities and may involve one or any combination of the aforementioned factors.
The need to be able to recognize these signals is a good reason why the experience of a knowledgeable investment professional with a day-by-day familiarity with the market is so invaluable to an individual investor.
Mistake #5: Lacking an independent analysis concerning your investment options.
What to do and when to do it are
the prime questions that face all investors. Having the benefit of an
independent analysis of your investment options by a knowledgeable investment
professional can provide a meaningful answer to this ever-present
question.
It is the job of Strategic Capital Management to be aware of
the many factors that can affect the business outlook of different industries
and of specific companies -- and to determine how these factors will likely
affect the price of the securities of these companies.
It is the job of Strategic Capital Management to be aware of the many factors that can affect the business outlook of different industries and of specific companies -- and to determine how these factors will likely affect the price of the securities of these companies.