This document discusses several common investor challenges: not having a clearly defined investment objective, improperly judging risk by focusing only on short-term volatility despite a long time horizon, paying too much in taxes by not structuring investments tax-efficiently, not investing globally by only investing domestically and missing out on foreign opportunities, and being led by emotions by making decisions based on fear or opinions rather than goals.

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Common Investor Challenges
Not having a clearly defined objective Not investing globally
Whether building a new house or an investment portfolio, you need A well-diversified portfolio should include assets with low correlation to
to establish a sold foundation. Gaining an in-depth understanding of each other. Many American investors tend to learn to lean toward
your unique financial goals is key to this process. Your personal domestic securities and avoid global investing opportunities altogether.
portfolio investment objective will take into account and your risk By investing only in U.S. stocks, you could miss out when foreign stocks
tolerance and time horizon. Specific strategies can be created to perform well.
address a single objective or a combination of objectives
simultaneously.
Being led by your emotions
Improperly judging risk Every day you hear new theories or speculation about the direction of the
stock market from the media, friends, family and coworkers. It can be
In general, the longer the time horizon of your investments, the more challenging to sort through differing opinions, filter out the noise and
risk you can take on. Many investors, fearing even a little amount of stay focused on your long-term investment goals. Many investors find
risk, focus on only investments that address short-term volatility themselves preoccupied with the fear of investment losses and
even though their time horizon may be 20 years or more. The result is mistakenly make costly investment decisions.
a poorly performing portfolio in relation to their investing goals and
time horizon.
Being overconfident in a single stock
Paying too much in taxes Relying solely on your intuition or creating attachments to specific
stocks or sectors without reading impartial analysis and reports can
Structuring your investments properly by mitigating the effect of lead to poor investing decisions. For example, employees of a firm
taxes on your portfolio can help preserve and ultimately grow more of will often make excessively large allocation’s to their employers
your investments over time. Not using tax-efficient money managers stock, believing they can better predict the stock price because of
or strategies their intimate knowledge of their firm. This is not always true, as
demonstrated by cases such as Enron.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
Securities offered through LPL Financial, Member FINRA/SIPC