4 Silly Investing Mistakes That Could Cost You | Personal-finance

Take real estate investment trusts (REITs), companies that operate or finance income-generating real estate. Investing in a REIT is a great way to diversify a portfolio and get into real estate without actually having to buy buildings. But if you don’t understand how they work, you might want to pass. Better yet, do some further education and then make a decision one way or another.

3. Invest only when stocks are rising

If stocks are doing well, you may have more incentives to invest than during times when they are underperforming. If you limit yourself to investing only in bull markets, you could be missing out on some important opportunities. A better bet is to commit to pre-investing at set intervals. It’s a strategy known as dollar cost averaging and has been shown to help investors pay a lower average stock price for the stocks they buy than they would try to time the market.

4. Do not invest with tax breaks

There is nothing wrong with opening a brokerage account and buying stocks with it, but you may not want to limit yourself to just one brokerage account. In fact, it’s worth investing in a retirement plan like an IRA or 401 (k) for the tax benefits. With a traditional IRA or 401 (k), investment gains on your account are tax deferred until you make withdrawals. With a Roth IRA or 401 (k), you can enjoy investment gains completely tax-free. That’s a ton of savings to miss out on, especially when you consider that with a traditional IRA or 401 (k) you can get a tax break for just contributing.