Unused gym memberships, lottery tickets, and cheaply made clothes are just three of the top money wasters among American consumers. But when it comes to retirement, those money mistakes are greatly outweighed by some much bigger financial blunders.
A new special report from U.S. Money Reserve outlines five things you should avoid doing with your money in 2019. Two of the most noteworthy things are:
- Putting all of your eggs in one retirement basket
- Chasing fads
Avoid putting all of your eggs in one retirement basket.
You’ve no doubt heard this many times before, but it bears repeating because many of us ignore this tried-and-true advice.
Diversifying your retirement portfolio is one of the smartest things you can do, because, as we know, some eggs in our retirement basket are likely bound to break.
As noted by U.S. News & World Report, diversification is “one of the basic building blocks of a solid portfolio.” Of paramount importance is that diversification decreases risk since it’s difficult to gauge the long-term performance of various asset classes.
Diversification helps protect your portfolio if one or more assets take a tumble, according to the Financial Industry Regulatory Authority (FINRA), a nonprofit organization that oversees the broker-dealer industry.
One way to ensure a robust and well-diversified portfolio is to steer clear of asset classes that you don’t understand. Warren Buffett has become one of the world’s wealthiest people by staying with only those asset classes that he fully grasps.
You might want to make gold a component of your diversification strategy for one simple reason: It’s an easy-to-understand asset.
Check out the latest special report from U.S. Money Reserve to learn what other financial missteps you should try to avoid in 2019.
Don’t chase fads. Let others do that.
Get-rich-quick schemes have been haunting us for centuries. Among them are faked illnesses and classic “slip and fall” insurance scams.
Today, many people wonder if cryptocurrency and cannabis stocks will prove to be “get-rich-quick” schemes, too. While trendy, their long-term outlook remains to be seen.
Prices for cryptocurrency recently have dropped or have stayed flat. Amid unsubstantiated promises of huge financial gains, some fraudsters are preying on cryptocurrency speculators.
Victims of Homero Joshua Garza’s virtual currency scam, for example, lost more than $9 million, the FBI said in February 2019. Garza will spend 21 months in federal prison followed by three years of supervised release after pleading guilty to one count of wire fraud, according to the FBI.
What was Garza doing with his ill-gotten gains?
“Garza had a Ferrari, a Lamborghini, and a Maserati,” FBI agent Mark Munster said. “He went to Las Vegas in a private jet and took his employees out on the Vegas strip. He was definitely caught up in the lifestyle of being a startup mogul.”
Meanwhile, some asset holders are seeking higher portfolio returns with cannabis stocks. However, the portfolio “high” from these stocks could disappear. “This industry has been called the Wild West of investing, littered with overvalued companies and even scams in some cases,” TD Ameritrade warns.
These scams are so common that organizations like FINRA and the U.S. Securities and Exchange Administration (SEC) have issued alerts about cannabis stocks.
“Fraudsters often exploit the latest innovation, technology, product, or growth industry—in this case, marijuana—to lure investors with the promise of high returns,” the SEC warns.
Some asset holders may be convinced that cryptocurrency or cannabis stocks are the way to go with their portfolios, but they’re likely going in the wrong direction. Filling your portfolio with proven steadier assets, like gold, could point you in the right direction.
Curious about other things you should not do with your money in 2019? Download our free special report today!