The 7 deadly sins of investing

Fight these temptations to avoid making the same mistakes that have plagued investors for decades.

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VIDEO ON MSN MONEY

35Comments
Sep 29, 2013 3:31AM
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I'm just going to keep on doing what I do best which is to read these things and then do what I do.
Oct 5, 2013 11:02AM
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I cannot believe one of the worst and probably most common mistake was left off of this list, namely; not knowing when to sell a stock. Directly related but should be included seperately is; setting a sell price if the stock starts going down. Setting a sell price if the stock starst going up. This was one of the hardest lessons I learned, it cost me plenty to learn it, I hope I can save you some money, learn from my mistakes.
Sep 30, 2013 10:15AM
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V_L and I are some of the few folks that bring up the most important issue facing the Global Economy. The 500-700 Trillion Global Ponzi styled Banking Derivatives. These farce of an investments have no real connection to any a fiat based money system. They are plain an simply put, bogus computer generated scams created to cook the books, literally.

In spite of the FACT of in dept articles throughout the web, there is very little talk by the talking Heads about the biggest threat to the Global Economy, scam derivatives. Instead all we hear is about Government Shutdown, ACA, and other issues. Those issues pale in comparison to the Derivatives issue.

Oct 5, 2013 8:00PM
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"ask your doctor" ads seem to be doing well.  I tried to watch Barney Fife but couldn't due to "ask your doctor" ads interrruptions.  Switched to the local news and couldn't watch that for "ask your doctor" and "for your health" ads.  Oh, well, switched to the weather channel to see what the weather promises but still don't know.  But, I know "ask your doctor" ads must be doing well.  They've been on every channel I have tried to watch.  And, now we're gonna start hearing "Obamacare" ads, I'm sure like we have to listen to medicare supplement crap and reverse mortgage junk. All that seems to be left of this once great country is insurance and drugs crap!! Our leadership is pityful.
Sep 30, 2013 4:53PM
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V-L:  I'm always kind of confused when people mention 'fiat money'.  Basically, everything is valued in fiat money, be it gold, houses, building materials, collecting rent, food, water, anything.  Unless you are bartering, it all comes down to 'fiat money' anyway.

You mention 'you build things that generate income streams' - that would be a stream of fiat money, no??

If the dollar really goes down the tubes, there probably isn't any safe place to be.  
3 seconds ago
Quick lesson: There is a three-point consistency to validation... in order for something to have value there must be a way to validate it and a pattern of consistency to make the validation mean anything. A home appraisal might have Market data (sales), Cost to rebuild and Locality data to support the appraiser's estimate of value. With it, there can be intelligent credit extended based on the Risk of the borrower, the stability for the collateral appraisal data and a valid source of funds. Before 2000, the only really fiat credit extension was unsecured revolving, everything else cross-checked against actual asset values and revenues. Today, absolutely nothing validates. There are $630 TRILLION in derivatives alone. A derivative is a priority promise to give a return on investment in exchange for funds in a transaction. Banks made those contracts on credit extension that no longer jives with the appraisals and didn't verify that the funds in the derivative agreement actually weren't derivatives themselves. All derivatives prioritize ahead of any other lien (already challenged and the lien stuck). Without $630 TRILLION in revenues being generated and more for interest, nothing but a derivative has potential validity. Your cash, stocks, bonds, real estate (because the values won't sustain if mass foreclosures resume) get compromised. There isn't anything left for you. MY stuff transcends because  grasped what derivatives were and found counter-cyclical inventory and paid cash for it. it's mine, so it cannot be trumped by any prioritization. It's retail value will be consistent with the economy post-collapse and since people need it, I merely have to validate a currency. It was my career to do that! Too many fools wanted to be rich... I just wanted to live through what greed has set us up for. 
Oct 28, 2013 9:19AM
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You shouldn't just "dust off" old articles and repost.  Your "Facebook is trading at $41 now", um, it is more like $52.
Sep 28, 2013 9:20PM
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I agree with all of these points except the last.  As far as I know, it has been conclusively demonstrated that the day-to-day stock market moves are random.  Further, it has been demonstrated many, many times that it is nearly impossible to beat the stock market over time.  However, all of the signs point to an increase in interest rates over the coming months.  I have spoken with financial advisors and trust advisors at major banks and they all ADMITTED that they could not give me a good reason to have money in bond funds.  I have therefore put the bond allocation portion of my portfolio in cash,  I will re-evaluate at year end and quarterly thereafter.  Unlike stocks which have no limit on the upside except for fundamentals, there clearly is little if any upside to bonds, there's just no room unless we have negative interest rates.  And with interest rates so low already I am not risking a great amount.
Sep 29, 2013 3:59PM
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Unfortunately  this article is full of over simplifications  Lately momentum investors have made great returns - look at Netflix, Amazon and Tesla.  Facebook may soon join this group.  These stocks all trade far above any reasonable long term valuation.  This shouldn't happen, but it does.  Bonds and Bond funds can be good or bad investments depending on duration, interest rate and fund leverage.  An investment today in Build America Bond funds will return about 8% while an investment in 10 year Treasury Bonds returns less than 3%.  In my opinion there is very little interest risk at 8% and BABs are a good risk, especially in a diversified fund.  If you have a bad stock and you hold it and it comes back you are a hero, if it goes bust you are stupid.  When experts disagree on a stock an individual can only hope they are following the best advise.  If you want an example read up on the history of Cedar Fair or just look at Face Book right now or better yet look at the history of Apple.  All any investor can do is learn as much as possible, consider as many other points of view as possible and try not to trade out of either FEAR or GREED.

 

Scott

Oct 13, 2013 3:32PM
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I realize they were trying to do a cute thing with a connection to the real 7 sins, but it misses probably the biggest financial problem. Let's call it "Fear". That's putting all you money in cash instruments and letting it sit and be eaten away by inflation. You won't have any obvious losses to swallow, except that the cash you eventually spend won't be worth near as much as the cash you saved.
Oct 12, 2013 10:00AM
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The biggest losses have come from believing that wall street regulators and the large accounting firms can sniff out fraud.
Oct 22, 2013 4:43PM
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Interesting thought came to mind as I was browsing these comments.  Theoretically speaking, over the next ten years I could save up enough cash and contribute enough to a 401K, that has done pretty well; to quit my job, withdraw my 401K, pay off my house, car and any remaining school loans and thereby making me debt-free and outright owner of my house and car.  My remaining monthly bills and taxes would total approximately $15k per year which a simple part-time job should easily cover...

 

...and thus meaning I could retire at age 40!  This is absolutely mind-boggling.  Anyone see a reason why I shouldn't shoot for this goal other than the fact that I won't be making $100k/year for the sole reason of making $100k/year?

Oct 5, 2013 8:11PM
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My advice to potention or current investors.  Forget about money.  Invest in a Bible and read it.   Try to follow it's instructions the best you can.  And for all those out there who will "thumbs down" me and for those who will call themselves "atheists" explain to me how the Sun and moon has lasted as long as they have without maintenance .  Explain to me what man made things have lasted as long as the Sun and moon with maintenance!!!  And, if you're going to give me the "science" theory, don't waste time.  Who created the laws of gravity????  Not who discovered them?  Who created them???  I don't worry about investing in man made junk.  That is for Wall street and the legal drug dealers.
Oct 5, 2013 12:19PM
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Another piece of America's grand illusion.  Let me tell you a fairy tale.  You have a one hominid-one vote representative democracy where all are equally represented.  You have a free market economy.  Investing on Wall Street operates fairly for all and isn't Vegas style gambling for working americans.  You are a free and informed people with a free press who's primary concern is informing the public and exposing mistruths.  You are a shining city on a hill, a beacon of freedom for the world, and an example of what a free and open democracy can aspire to. 
Sep 28, 2013 10:59PM
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first of all in the last10  years gold outperformed stocks like coke , oil refiners,intel dell ,and  others.so is not true that always stocks outperform gold,.during Clinton era high flier stocks like Enron ,WorldCom Amd ,global crossing GM,sun microsystems,worldcom aol all went down more than 90% from its peak and most of them went bankrupt but gold kept its value and even went up since 2005 4 times ,on the other hand copper since 2003 to 2013 outperformed the nasdaq and dow same for lithium.,speculatives stocks can go out of business or its price reduced 90%.Obama wants now people buy these stocks because his middlemen and small investor bought them with banks loan without collateral and banks are stuck with them and need to find innocent people to buy them because 401k funds have too many of them too,OUr president is lawless and has no integrity he only wants to make money for himself and for his greedy financial supporters.Hope investosr check what I said here they will see I don't lie
Sep 29, 2013 5:47AM
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When the Super'Rich are running away from a burning building, you don't run inside. But that's exactly what's happening right now. The little guy/gal is being lured into a death trap.

As the SuperRich are selling their stocks by the Truckloads, they are telling everyone else to buy in. As the Mega Corporations are selling Record amounts of Debt, they are telling everyone to buy in. As Uncle Ben and the Global Feds print to Infinity, they are telling everyone that's things are getting much better. The Talking Heads are misleading us about China, Japan, Euro-Zone, and America.

We can't have soaring National Debt, Student Loan Debt, FED balance sheet Debt, Corporate DEBT, Global Debt, along with stubbornly high Crude prices and not expect eventually stocks to take a major hit. Investors are being led to think that future stock markets gains will be just like the last few decades. Markets can also be like the the decades before when Stock Markets went practically nowhere for decades.

Since it's literally impossible to predict the exact date and or come anywhere close, most folks will fall back on, well it recovered before. Well before we didn't have printing to Infinity, massive Derivative exposure Globally, and more Computers trading than Real People. I fully expect it will be much worse than nowhere for decades when this Big Bear does eventually arrive. And it will. However this time around, the FED will be taped out and investors won't be rewarded for being patience and waiting out for a New Bull Run. Most will be totally wiped out.

Sep 29, 2013 8:30PM
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There are $630 TRILLION in outstanding derivative obligations that prioritize AHEAD of stocks in a liquidation. There was only $50-60 Trillion in currencies worldwide just 15 years ago. 90 MILLION Americans are under or unemployed and living below the Poverty Line. Your neighbor could easily be the 1 in 6 of us reliant on Food Stamps. Smaller government lets a rich person hire an assassin to exterminate you after a hacker redirects your online-accessible assets. Individual states elected each pledge signer in the Party of NO that acts in collusion solely along party lines attempting to compromise the President and destroy the nation... over FAKE money the world is quickly seeing as not worth anything. 

Isn't the deadliest of investing sins-- believing money is more important than life itself? Do us all a favor and end your pathetic selves today. FREE AMERICA FROM GREED AND GRUBBERS.  
Sep 30, 2013 6:44AM
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The 7 Deadly Sins of Investing...

1. A Kool Aid addiction... boo ya, boneheads!
2. Belonging to the GOP (blind to Reality).
3. Thinking "what would Buffett do" and doing it- is an investment strategy.
4. Thinking like a 20th Century investor in the 21st Century.
5. Reading and believing anything presented in MSN Money.
6. Thinking you know more than corrupt billionaires.
7. Ignoring the rigging flailing all around you and staying 'all-in' an obvious trap. 
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