4 common investing mistakes

Having a plan may help you avoid them

We all have goals. But just because you're regularly putting money away doesn't necessarily mean you'll reach those goals. An effective investment strategy can show you what steps you need to take to help you realize your dreams—whether short term or long term—and give you confidence in your pursuit of them. For example, people with a financial plan are twice as likely to believe they will be able to afford retirement.1

Here are four common investment mistakes that can keep you from reaching all your goals—and information on how planning may help you avoid these issues.

Common investment mistake #1: Putting your investments on autopilot

You feel like you're in pretty good financial shape already, so you hold off on setting investment strategies for how to achieve your goals. Or you create an investment strategy, but then life gets busy and you fail to review it on a regular basis because you're focused on other things.

What may have been the ideal portfolio a few years ago could be an ineffective path forward now—whether due to market volatility, changes in your goals or life events.

The birth of a child or grandchild or a change in your employment situation are good reasons to re-evaluate your goals and how your investments are helping you work toward them. You might have remembered to set up a 529 education savings plan for your grandchild, but have you thought about how that could impact your broader financial plan and short- and long-term goals? Don't assume your previous plan is still going to get you where you want to go.

Avoid the mistake: It's important to have a conversation with your advisor on at least an annual basis—and more often as your life changes—to ensure your portfolio investments and asset allocation reflect your current goals.

Common investment mistake #2: Focusing solely on retirement

Saving for retirement is a marathon, not a sprint, and your constantly evolving life means that your retirement goals and ability to save for them will also change over time. As such, retirement is often looked at as the holy grail of financial planning—and understandably so. It's usually what you'll spend the longest time saving toward, and your preparation for it is crucial to spending those years in comfort.

However, focusing too heavily on retirement can create a financial blind spot around the other important goals for you and your family. Your financial plan should prioritize your goals based on time frame and assist you in funding short-term enjoyment of your life without sacrificing long-term saving.

Avoid the mistake: Talk to your advisor about your short- and long-term goals and how they relate to your needs, wants and wishes. Your financial plan affects each of these, and small changes can increase the probability of achieving your goals.

Common investment mistake #3: Trying to time the market

When your goal is building wealth, daily market volatility shouldn't be a reason to panic and adjust your investment strategy. The allure of practicing market timing to try to reel in huge gains can be tempting. However, these kinds of decisions can undermine your long-term strategy and could lead to financial setbacks.

Knee-jerk emotional reactions, such as selling when you think bad news is imminent, can significantly hamper your chances of achieving long-term gains. You’re statistically unlikely to avoid the days of major market volatility, such as large drops. Similarly, keeping your money on the sidelines gives you a major chance of missing out on the days the market rises. Between 1999 and 2018, for example, the S&P 500 Index grew at an annualized rate of 5.62%. If you missed just the 10 top-performing days of the market, that annualized return dropped to 2.01%.

Timing the market can hurt your portfolio

If you don't stay fully invested, you run the risk of missing the top-performing days.


A solid financial plan isn't about speculation—it's about constantly monitoring and making smart choices. Trust your financial advisor to help you pursue your goals and make decisions based on sound strategy, not emotion.

Avoid the mistake: Use your advisor as a rational opinion to help you avoid making rash decisions. Having a sound plan helps you weather ups and downs in the market with the goal of longer-term success.

Common investment mistake #4: Avoiding financial discussions

For many families or individuals, a conversation about money and estate planning can be stressful. Unfortunately, being unwilling to discuss your finances can lead to confusion and hurt feelings in the future. A family meeting with your advisor is often a good way to start these challenging discussions.

Family conversations help everyone—from your partner to any adult children—understand your current state of finances, your goals and plans. That helps ease tension when you make a financial decision that's important to you, such as donating to a favorite charitable cause.

Avoid the mistake: Your advisor can help facilitate these often emotional discussions by hosting a family meeting that can help get you and your loved ones on track and up-to-date on your wishes.

It's OK to talk about your finances

People know financial conversations are important, but aren't prone to start them.

Talk about your finances

Your TIAA advisor can help you

The good news is that working with a TIAA advisor can help you avoid these common challenges and misperceptions about investing and money. An advisor not only looks at what you need to do in order to live the retirement you dream about, but also analyzes your short-term goals and gives you a roadmap to address them while avoiding financial setbacks. Whether you're 45 or 65, setting goals and developing a solid financial plan can help increase your confidence.

Importantly, your advisor can help you balance your short-term and long-term goals, show your probability of reaching them, recommend action steps that seek to improve that probability and then help you implement those decisions.

Ready to take the next step? Your advisory team from TIAA Individual Advisory Services is committed to creating a plan to help you pursue your financial goals and work with you as your life progresses, priorities change and markets shift.

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1 Employee Benefit Research Institute 2017 Retirement Confidence Survey.

2 The S&P 500 index measures the performance of 500 widely held stocks in U.S. equity market. You cannot invest directly in any index. Unlike mutual funds, index returns do not reflect a deduction for fees or expenses.

The TIAA group of companies does not provide tax or legal advice. Tax and other laws are subject to change, either prospectively or retroactively. Individuals should consult with a qualified independent tax advisor, CPA and/or attorney for specific advice based on the individual’s personal circumstances. Examples included in this article, if any, are hypothetical and for illustrative purposes only.

This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances.

Advisory services provided by Advice & Planning Services, a division of TIAA-CREF Individual & Institutional Services, LLC, a registered investment adviser.