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Adviser John D. Spooner: Avoid These 3 Investment Mistakes

Adviser John D. Spooner: Avoid These 3 Investment Mistakes
(Dollar Photo Club)

By    |   Friday, 10 November 2017 12:01 PM

Adviser and author John D. Spooner offers a trio of tips for budding investors who want to breeze along the path to financial success.

"There are endless ways to analyze the stock market, its trends, fads and individual companies," CNBC.com cited Spooner as saying.

"My style is to be a contrarian, to go against popular sentiment," wrote the author of "No One Ever Told Us That: Money And Life Lessons For Young Adults."

"My style is to be a contrarian, to go against popular sentiment. When I identify areas I think are undervalued and unappreciated, I move into them aggressively," wrote Spooner, a Harvard University graduate and a Boston Globe No. 1 best-selling author.

Spooner, who has been named one of the 100 best financial advisors in America by financial-investment website Barron's, offered 3 tips:

  • Don't Count on Algorithms

"As you get older, you suddenly realize you [may not] have the time to invest on your own. You need hands-on advice, not virtually, not by robots, but by real live smart people who consider the best interest of you and your family. Tough to find. But it can be priceless if you do."

  • Don't Get All Your Information From TV

Using common-sense strategies, instead of merely listening to talking heads, can give you a boost. When investing in pharmaceutical companies, Spooner says this strategy helped him get ahead.

"We started to buy this group in 2008 on one seemingly easy-to-grasp idea: The demographics of America and the world. With more than 320 million Americans and seven billion people on the planet, no one you and I know will ever be taking fewer pills than they are now," he recalls.

  • Don't Get Lazy

"If you're a contrarian, [which] often takes time to develop, you should continuously try to shoot holes in your thinking and actually question, 'Are my assumptions still valid?'” Spooner asked.

"When the public seems to have discovered your theme, then it is time to start slowly exiting those stocks and looking for what's next," he says. "Let the people who are late for the game get in last."

To be sure, U.S. investors favored international stock markets, pushing $4.1 billion into equity funds focused abroad during the most recent week, dodging risks at home, Lipper data showed on Thursday.

Domestic stocks funds took in just $631 million during the week ended November 8, Lipper said. The data covers mutual funds and exchange-traded funds (ETFs) based in the United States, Reuters explained.

The small haul for domestic stocks comes as investors question whether competing Republican proposals to change the U.S. tax code will be merged into a plan that can gain congressional approval this year.

A corporate tax cut would boost profits, but Senate Republicans are unveiling a proposal that differs markedly from legislation detailed by their counterparts in the House of Representatives.

Non-domestic funds have pulled in $149 billion this year, compared to their domestic counterparts, which have recorded outflows of $13 billion.

Cameron Brandt, director of research at EPFR Global, said the record-setting inflows into global-focused funds are less an endorsement of risk-taking than a demonstration of the “anxiety” investors have about U.S. markets.

“It’s a sign that they are uncertain about the near-term economic outlook,” he said.

The flows may also constitute an endorsement of faster-growing developed markets abroad.

U.S.-based stock funds that invest in Japan took in $758 million, the most since March 2015. European stock fund inflows of $317 million were the biggest since July.

“The market is doing well, the yen is getting weaker and investors are seeing that,” said Tom Roseen, head of research services for Thomson Reuters’ Lipper research unit.

(Newsmax wire services contributed to this report).

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Adviser and author John D. Spooner offers a trio of tips for budding investors who want to breeze along the path to financial success.
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Friday, 10 November 2017 12:01 PM
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