>> Stocks have been soaring for 2 months now yeah. In April alone the SMP 500 was up 37% from a 12 year low in early March but before you jump back into the market some words of warning about 3 common money mistakes from Jill Schlesinger. She is editor at large at CBS Moneywatch.com. Good morning.
>> Good morning.
>> You gonna rain on our parade?
>> A little bit.
>> Ok why shouldn't we dive in?
>> Well first of all we are still talking about a risky asset; the stock market. Have we learned nothing in the last 2 years for goodness sakes? Laughter Really this is high risk stuff and it's very important to remember that.
>> Ok so what are the 3 most common mistakes that people make?
>> I would say number 1 which is really interesting, the fear, the thinking like well the stock markets up I'll just dive right back in. Well why are you gonna dive in just because the stock market is up? There are questions you should ask yourself. And those questions include: Should I really be buying stocks right now? Has my risk profile changed? My time horizon changed and if I'm sittin on a pile of cash what's my actual plan to reinvest it? In other words your just gonna buy because we're at a higher level than we were 3 months ago. Makes no sense.
>> No. Who should be investing in the stock market?
>> I think anyone who has that good time horizon. You don't need your money for 10 years. You understand the risk to have a diversified portfolio of course that makes sense. But it is not realistic to count on this rising stock market to do all of that heavy lifting for you and that's probably the second big money mistake.
>> Which brings us to number 2. You have to be in charge of your own finances.
>> You have to be self reliant. I can't stand it when people say oh I'll just, my house will go up in value, my stocks will go up in value that's how I'm gonna pay for this. No, no, no. You know my mother always likes to say you gotta take care of yourself and she's also been fond of saying what's his is mine and what's mine is mine. Laughter
>> I love your mom.
>> Exactly and the great Susan would say you've got to take care of yourself, don't count on anything else to do it. That means you be proactive, save, do the things you need to do.
>> Ignorance is not bliss when it comes to your finances.
>> Indeed.
>> Ignorance is just dumb.
>> It is just dumb and the last mistake that I like to talk about is don't fall prey to big huge marketing schemes. Now I'm gonna tell you that right now for the last year and a half brokers have not been calling their clients. They have been like hiding under their desks.
>> They're calling again aren't they?
>> They're calling again because the stock market is up and they know they can reel you back in. If you see a big ad for a mutual fund say to yourself today's winning fund could be tomorrows loser. I could be buying next weeks looser. Be very careful about that and just again know yourself. Know your risk tolerance. Have a good time horizon and just because the market's up doesn't mean you just jump right back in.
>> There's never a time to do that right?
>> No
>> You always have to weigh for so many things.
>> Exactly and again a game plan is so helpful in this respect if you have a way to say ok how am I going to reach my goal? What is my goal and what are the steps I'm going to take to get there? That will drive you. That will get you to the right place and you won't fall prey to your emotions and you know finally I want to say one very clear thing. There is no magic man behind back curtain. There is no wizard. Nobody knows the magic of when the stock market is gonna go up or down. If you can really get comfortable with that fact there's uncertainty in this and be comfortable with the risk you will be a more successful investor but stop trying to find the ultimate answer. There is none.
>> Thank you. Jill Schlesinger always appreciated.
>> Thank you.
Music
==== Transcribed by Automatic Sync Technologies ====
