People behave according to their mindset. Some of the following thinking can keep one from putting their money to work, which could be achieved by buying equity investments such as equity investment funds. Psychological fear can also hold one back from investing. Here are five mistakes that can keep you from building your investment portfolio.

1. Waiting for the markets to pull back and lose some value Sure, it makes sense to buy investments at bargain prices (for a fund investor, this means buying at lower unit values). However, procrastination can be based on needing “belief confirmation” before acting. The problem is that this mindset may avoid evidence that contradicts their belief. The media frequently offers bad news. If the market has a low day, this can confirm such negative beliefs. Other positive news is often filtered out if it does not prove the belief that the market could pull back and decrease in value. This process can paralyze an action plan to invest for years. The best plan may be to buy more fund units when prices are 7-10% lower.
2. Missing opportunity when it is evident If the market becomes bullish and rises in value, a procrastinator with this bias can ignore facts such as the earnings news that the top Canadian banks all earned excellent profits or that the uranium-related security prices were at a reasonable price to buy (this reflects similarly on such unit values held within funds holding these stocks). Even positive media and rising market momentum can conflict with fearful notions one believes about investing.
3. Quickly selling investments upon noting an initial profit People might sell an investment early once it rises in value for fear of any future loss. Aside from considering taxation, once sold, an investment with either a gain or a loss ends any potential for that investment to rise in value. To avoid this mindset, one should have a disciplined written plan worked out by an investment advisor for buying or selling investments. Then, one should frequently refer to it.
4. Fear of a market correction when values reach a historical value “Anchoring” an investment viewpoint occurs when someone assigns a reference number, like a 52-week high or low, to compare the price of an investment fund’s unit value. Past price movements are poor predictors of future price performance. When you invest for the long-term for retirement, using a historical price is comparable to driving your car backwards on the expressway.
5. Stopping all future investing due to market frustration If someone sold their investments too early due to fear (for example, in the 2008-9 debt crisis), the emotional repercussions from their past investment losses could make them vulnerable to avoid investing altogether. During such times, an investor must refer to written investment goals that align with the person’s risk tolerance, with well-established goals (short-, medium- and long-term) that can help one wait (especially about long-term retirement) and not sell when the market is down. With the help of an advisor, this agreed-to plan is essential to create mutually with one’s partner/spouse, to avoid differences, and to stay on track if a doubt arises.
6. Not seeking a credentialed financial advisor’s help Many procrastinate and generally need professional guidance and motivation to begin and stick to investing according to a written plan. If your circumstances change, this plan can be tweaked.

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