BMO Financial Group

BMO Financial Group

January 21, 2013 07:00 ET

BMO InvestorLine: Avoid Common Investing Errors by Planning Carefully and Strategically

TORONTO, ONTARIO--(Marketwire - Jan. 21, 2013) - According to BMO InvestorLine, the New Year is a perfect time for Canadians to review their investing habits to ensure they are avoiding common mistakes when building their portfolios.

"People often get caught up in the idea of playing the market instead of taking the time to educate themselves on the appropriate strategies that match their investment objectives", said Viki Lazaris, President & CEO, BMO InvestorLine. "Avoid major investing errors by planning carefully and knowing where and how you will invest throughout the year. This will keep your portfolio well balanced and can help you build towards saving for your short- and long-term financial goals."

BMO InvestorLine encourages investors to consider the following:

  • Goals and Objectives: Different goals require different types of investments. Identify your objectives before choosing your asset mix. More liquid investments can help save for short-term goals such as buying a car, while growth-oriented investments that have the potential to appreciate over a long period of time are more appropriate for long-term goals such as retirement.

  • Be Selective: Choose investments that strategically build upon your existing portfolio and balance risk and return. Consider holding more than one of each investment type and having a mix of both conservative and aggressive investments. For example, for your stock holdings, select 10 to 30 stocks that cover a range of industries, such as financials, utilities, technology and healthcare. Diversification will make your portfolio less susceptible to market fluctuations.

  • Avoid the Hype: Do not fall prey to one of the most common investing mistakes by chasing performance and rumours. There is no guarantee a stock will continue to appreciate; by the time you buy into a "hot" sector, stock values may have already reached their peak. Read below the headlines and be sure to do your research beforehand to help ensure your investment choices are being made for the right reasons.

  • Foresight is Key: Having a plan for selling investments is just as important as having a plan for buying them. Consider setting up specific criteria ahead of time to avoid selling at an inopportune time. For example, decide that you will sell an investment if it loses or gains a certain percentage, after a designated period of time or if an investment's performance falls below a benchmark.

  • Timing Matters: Although it is wise to have criteria for selling an investment when it is not performing as expected, it is also important to avoid overreacting when the overall markets experience a downturn. Re-evaluate your investments periodically to make sure that they are on track to meet your short- and long-term goals and best suited for you and the market conditions. If you have a long investing time horizon, waiting for the market to rebound instead of selling could be beneficial over the long run.

To help investors address some of the factors above, BMO InvestorLine recently introduced adviceDirect., the first service of its kind in Canada that puts investors in control by providing specific investment recommendations to help them manage their portfolios. adviceDirect is designed for those who want to invest independently through an online brokerage, but require advice when making decisions.

"The New Year is an ideal time to review your portfolio and adviceDirect is a great tool to help you do so", said Ms. Lazaris. "What's truly unique about adviceDirect is that it provides continuous portfolio monitoring and notifications. It will advise you when your portfolio requires attention related to your asset allocation, level of diversification, poorly rated equities and if your portfolio has more risk then your investor profile allows. It is like having your own virtual investment advisor. Not only do we alert you, but we provide recommendations and advice on where to correct these issues so your portfolio is aligned to your investment objectives."

For more information about online investing and adviceDirect, please visit

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About BMO InvestorLine

BMO InvestorLine is an online investing service that provides clients with two ways to invest online. Clients can choose from BMO InvestorLine's top ranked Self-Directed service that provides tools to help investors make independent decisions on how to invest. BMO InvestorLine's other service, adviceDirect™ provides investors with online advice and investment recommendations for their portfolios. Clients have access to trading, quotes and account information 24 hours a day through a website or Automated Telephone Trading. BMO InvestorLine also provides users with third party research, along with leading edge tools that are informative and easy to use. As an all-in-one investment source, it is a constantly evolving, cost-efficient platform that is fully compatible with tablets.

BMO InvestorLine Inc. and BMO Ligne D'action Inc. provide this commentary to clients for informational purposes only. The information contained herein is based on sources that we believe to be reliable, but is not guaranteed by us, may be incomplete or may change without notice. The comments included in this document are general in nature, and professional advice regarding an individual's particular position should be obtained.

An adviceDirect account is a non-discretionary fee based account which offers investment recommendations. adviceDirect does not provide portfolio management by a portfolio manager. The client makes their own investment decisions and manages their own investment portfolio. adviceDirect does not offer discretionary, managed accounts.

BMO InvestorLine Inc. is a member of BMO Financial Group.

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