by Stuart Danforth

Have you ever taken a trip and realized that you don’t know where you are and the map that you have in the glove compartment doesn’t show the road you’re on? Sometime investors feel the same way: All too often people invest for the wrong reasons—and that can lead to financial potholes, flat tires and wrong turns.

1. Holding unrealistic return expectations. Many investors assume that the goal of investing is to simply earn the highest return possible without losing money. Performance-focused investors are not satisfied unless they “beat” the market. The problem with shooting for the highest return possible as the main goal in investing is that it can create unnecessary risks and erratic investing patterns that ultimately undermine your efforts to achieve those life goals that truly matter to you. The bear market of 2000-2002 harshly demonstrated to many exuberant investors that high double-digit returns were not a given.

Wise investors and experienced financial advisors will tell you that a proper investment strategy will help you realize major life goals: a comfortable retirement, a dream job or business, a college education for your children, funding for your favorite charities, or accumulating assets to pass on to your heirs.

2. Taking unnecessary risks. Investors who only seek the highest possible returns are more vulnerable to investment scams offering returns that “are too good to be true.” Much of the riskiest investing, overbuying, and panic selling during the late 1990s and early 2000s would have been avoided if individual investors had created their own investment plan for achieving long-term specific goals such as retirement or a college education. A proper balance between risk and return is critical.

3. Not taking enough risk. Many investors are now afraid to invest at all and some even stopped contributing to their company-sponsored retirement plans. They shifted their entire portfolios to low-yielding savings accounts and have missed many subsequent market gains. Again, they lost sight of the real purpose of investing and have hindered their efforts to achieve long-term financial goals. Taking the right amount of risk is necessary to achieve the returns you need to reach your goals.

4. Failing to diversify. Finally, chasing the hot fund, stock or sector is a mistake that many investors make. Proper diversification and asset allocation are more than simply not putting all of your eggs in one basket. As the saying goes, past performance is no guarantee of future results.

WHAT ALL SUCCESSFUL INVESTORS KNOW

Goal-based investing is the secret that successful investors hold dear to their hearts and their investment accounts. Think of your accounts in the way that one investor does with two of her accounts: One represents her daughter’s college tuition and another is for the party she is going to have when she retires. With this approach, this woman’s investments are translated into goals, specific moments in the future that represent financial success and security. Through the process of aligning lifetime goals with investment strategy, financial advisors and successful investors know that “beating the market” is really a myth.

Define your destination first: then draw the best route for the journey with your financial advisor and align your lifetime goals with your investment strategy. After all, even the finest maps in the world are useless if you don’t know to where you are traveling.

Stuart Danforth of Danforth Associates, a Wellesley, MA based investment advisory firm that has assisted investors with their wealth development goals for over fifty years. http://www.danforthassociates.com

Who would have know that investing can be so similar to building a business? This week take some time to look at your financial goals. If you don't have any, take some time to think about what you want and write that down. Then review your plan. Don't have one? Perhaps it's time to meet with an investment advisor.

May 15, 2006
Simple Habits That Transform Workshop Series
May 15, 22; June 5, 12, 19—Monday evenings, 6:45-9:00
June 26 and July 10: Teleconference Support Meetings: 7 – 8 PM
Marion Freiberg, Andrea Novakowski, and Sandy Davis

Have you read the books and attended the workshops—but not gotten any “traction” yet? Are you ready now to finally transform your daily life by taking action? If so, join Coach Andrea and two other certified coaches for the 9-week “Simple Habits That Transform” workshop series. You, and a supportive community of like-minded folks, will experience and put into practice three of the most powerful daily habits you can do to revitalize your body, mind and spirit. Come to learn, play, and do. Work together to remove the roadblocks. Build a plan that fits where you want to go and what you want to become. Put yourself at the center of your life by incorporating these powerful new habits while supported by experienced coaches.

Even when we know what works to re-energize and renew ourselves, we may hesitate to act for any number of reasons. “No time”, “I’ll do it later”, “I don’t know how”, “I’m not the type”, “I’m too old”, etc. Come together with experienced coaches and an enthusiastic group to break through your limiting beliefs and move into action. In this workshop, you will learn simple new skills that can powerfully shift your energy level, expand your enjoyment of life, and increase your ability to deal with its ups and downs. You will explore and expand your creativity, your resilience, your health, and your energy.

This course spans 9 weeks so that you have time to incorporate these skills into your daily life, and enable them to really take root.

To ensure you get enough attention, this interactive and energizing course is led by three experienced, certified coaches: Marion Freiberg, Andrea Novakowski and Sandy Davis.

This workshop begins May 15th from 6:45 to 9:00 PM at Unity Church in Amesbury, MA, $150 fee. Limited to the first 20 who register. To reserve your place or learn more, call Andrea at 508-231-0766 or e-mail andrea@coachandrea.com.

Remember that CPR course you took in high school? Is it time to get recertified?

ABC CPR can get you your training, any time, anywhere— however it works best for you.

• Courses in Basic Life Support (BLS), Cardio-Pulmonary Resuscitation (CPR), Automated External Defibrillator (AED), First Aid, and the certification of instructors to train these skills.
• Ongoing weekly instruction in all skills at the ABC CPR training center in Framingham, with several scheduling choices on a weekly basis at all levels of training.
• Onsite training at your home, workplace, or facility in CPR, AED and First Aid.
• Onsite workshops in health promotion, including hand washing, OSHA requirements, and infection control.
• Coordination and establishment of your Public Access to Defibrillation program, including training, implementation and mock drills.

For more information call Carolyn Tomao at (508) 875-0825 or e-mail carolyn@abccprservices.com.

Coach Andrea's Coaching Tip of the Week is brought to you by Andrea Novakowski, Master Certified Coach who provides Business and Personal Coaching to Executives, Small Business Owners, Professionals and Managers. Andrea is a professional coach who partners with people to set goals and create momentum to produce effective results in their business and/or personal lives.

Andrea is available for individual coaching. If you are serious about reaching your goals and living with greater fulfillment and satisfaction, consider using a coach. To schedule a COMPLIMENTARY initial consultation, send an e-mail to Andrea at
andrea@coachandrea.com.

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