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Of the common mistakes made by investors, most are repetitive in nature. In fact, investors have been making these same mistakes since the dawn of modern markets, and will likely be repeating them for years to come. You can significantly boost your chances of investment success by becoming aware of these typical errors and taking steps to avoid them.

Here are the most common ones:

No Plan

As the old saying goes, if you don't know where you're going, any road will take you there. Solution?

Have a personal investment strategy that takes into account the following:

Objective - Figure out what you're trying to accomplish. For instance, accumulating Rs. 10 lakhs for a child's college education or Rs. 20 lakhs for retirement by the time you turn 60 years old would be appropriate goals – these goals are both measurable and achievable. Beating the market is not a goal.

Risks - What risks are can you afford to (or are willing) to take? If you are a 30 year old who is saving for retirement, dealing with volatility is probably a risk you can afford to take. On the other hand not investing in the markets is a risk you may not want to take. What does that mean? It means that you risk losing out to inflation if you stay out of the market - which erodes any long-term portfolio – and that is a significant risk for you.

Benchmarks - How will you measure the success of your portfolio, its asset classes and individual funds or managers? Setting benchmark is an essential to-do.

In India, the BSE Sensex and the Nifty are the most common benchmarks for large-cap funds. Other benchmarks are CNX Midcap, CNX Smallcap, CNX IT, CNX 500, BSE 200 and BSE 100.

You can compare your funds to the appropriate benchmark to know if it has underperformed, stayed at par or outperformed the benchmark.

Asset allocation –It is investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance and investment horizon.The three main asset classes - equities, fixed-income, and cash &cash equivalents - have different levels of risk and return, so each will behave differently over time.Your asset allocation should accomplish your goals while addressing relevant risks.

Diversification - Allocating to different asset classes is the initial layer of diversification. You then need to diversify within each asset class.Your investment plan's guidelines will help you adhere to a sound long-term policy, even when market conditions are unsettling. Having a solid plan and sticking to it is not nearly as exciting or as much fun as trying to time the markets, but will likely be more profitable in the long term.

Too short a time horizon

If you are saving for retirement 30 years hence, what the stock market does this year or next shouldn't be your biggest concern. Even if you are just entering retirement at age 70, your life expectancy is likely to be 15 to 20 years more. If you expect to leave some assets to your heirs, then your time horizon is even longer. Of course, if you are saving for your daughter's college education and she's already in high school, then your time horizon is short and your asset allocation should reflect that fact. Most investors are too focused on the short term.

Too much attention given to financial media

There is almost nothing on financial news shows that can help you achieve your goals. Turn them off.

Solution? Spend less time watching financial shows on TV. Spend more time creating - and sticking to - your investment plan.

Not Rebalancing your portfolio

Rebalancing is the process of returning your portfolio to its target asset allocation as outlined in your investment plan. Rebalancing is difficult because it forces you to sell the asset class that is performing well and forces you to buy more of your worst performing asset classes. This contrarian action is very difficult for many investors. In addition, rebalancing is unprofitable right up to that point where it pays off spectacularly, and the underperforming assets start to take off.However, a portfolio allowed to drift with market returns guarantees that asset classes will be overweight at market peaks and underweighted at market lows - a formula for poor performance. The solution?

Rebalance and reap the long-term rewards.

Chasing Performance

Many investors select asset classes, strategies, managers and funds based on recent strong performance. The feeling that "I'm missing out on great returns" has probably led to more bad investment decisions than any other single factor. If a particular asset class, strategy or fund has done extremely well for three or four years, we know one thing with certainty: We should have invested three or four years ago. Now, however, the particular cycle that led to this great performance may be nearing its end. The smart (more) money is moving out, and the dumb (less) money is pouring in. Stick with your investment plan and rebalance, which is the polar opposite of chasing performance.

Investors who recognize and avoid these common mistakes give themselves a great advantage in meeting their investment goals. Most of the solutions above may not be exciting, and they don't make great cocktail party conversation. However, they are likely to be profitable. And isn't that why we really invest?

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Mutual fund investments are subject to market risks, read all scheme related documents carefully.