Tuesday, April 5, 2016

Teach Kids Not To Touch Investments

Today’s fantastic family finance article is:

Don't Touch Investments Sign

“Just leave it alone. Fiddling with it will only make it worse!”

Sounds like something you’d tell a teen about a pimple.

Well, the same holds for investing.

Check out the chart in today’s article. It compares what investors could have made by sticking with diversified long term investments versus what they actually made do to impulsive trading.

The average investor just doesn’t know how to leave well enough alone. They get worried when things start to look ugly, so they pick at their investments. The result? A failure to capture almost 1.8% of annualized total returns over 10 years. Over the long haul, that kind of gap can translate into bleeding away hundreds of thousands of dollars of potential earnings. Ouch.

So, teach your kids to leave those long term diversified investments alone. They’ll be rewarded with unblemished returns.

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