My Biggest Investing Mistakes

On my failings as an investor. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=46359&elqTrackId=77aa89cf3317442d8383c1b1645d2b6b&elq=95e78ce6fb70492aa567fddc6c72dd60&elqaid=46359&elqat=1&elqCampaignId=22793) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] A few weeks ago, I highlighted the [portfolio problem spots]( that I commonly run into during the course of my annual Portfolio Makeovers. What I didn’t say then is that my own record of portfolio management hasn’t been flawless. I decided to highlight some of my own portfolio problem spots in [this week’s column]( how they came to pass and what, if anything, I plan to do to correct them. My hope is that you’ll find yourself nodding through some of my foibles. One reader said that he matched four of my five portfolio trouble spots, including holding the same tax-inefficient fund that I made the mistake of holding in my taxable account! I noticed that many of my “mistakes” owed to inertia—being hands-off with my portfolio to an extreme. And I couldn’t help but think about inertia as I read through [John Rekenthaler’s recent column about older adults’ high equity weightings](. The reasons I have a lot of stocks in my portfolio—probably more than most professional asset allocators would recommend for someone my age—is that they’ve performed pretty well over my savings horizon of the past 35 years. Being both busy and content with their good long-run returns, I’ve left well enough alone. But it’s also true that the positioning is risky as we get closer to drawing upon our portfolios, which is why adding more bonds to my portfolio, including different bond types like short-term bonds and Treasury Inflation-Protected Securities, is on my to-do list in the years ahead. Speaking of risk, some market observers have been pounding the table for emerging-markets stocks, citing fairly low valuations, among other attractions. My colleague Amy Arnott recently took [a characteristically thorough look at the asset class]( its long-run performance attributes, its effectiveness as a diversifier, and current valuations. The takeaway? A market weighting in emerging markets can help improve a portfolio’s risk/reward profile but going much higher than the 8% or so that emerging markets take up in global markets indexes today adds excessive risk. Finally, on this week’s episode of The Long View podcast, [Jeff Ptak and I sat down with neurologist turned investment author/thinker William Bernstein](. Chatting with Bill is always a treat, but it was fun to hear that he’s particularly jazzed about [the new edition of his book The Four Pillars of Investing](. The original, which came out when I was but a cub of an analyst two decades ago, was always my favorite of his books, managing to be wise, accessible, and hilarious all at once. I’m happy to say that the second edition is just as good if not better. Put it on your list. With warm regards, Christine Benz [Do as I Say (Not as I Do)]( On my failings as an investor. [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [Have Older Investors Become Too Aggressive?]( What to make of their love affair with equities. [Read More]( [Are You Making These 5 Common Portfolio Mistakes?]( Problem spots in real-world portfolios—and how to fix them. [Read More]( [Should Emerging Markets Play a Role in Your Portfolio?]( Maybe, but handle with care. [Read More]( [Bill Bernstein: Revisiting ‘The Four Pillars of Investing’]( The author discusses the new edition of his popular investing book, plus the returns outlook, TIPS ladders, and more. [Listen Now]( [A Retirement Readiness Checklist]( Evaluating your retirement plan can be more manageable if you break it into smaller steps. [Read More]( Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2023 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602