Common Financial Mistakes I’ve Seen Repeat for Over Four Decades

^{When I entered this industry in 1983, the Dow Jones was sitting below 1,200. There was no internet, no ETFs, no 401(k) culture as we know it today. What there was — and what has never changed — is human nature. The same patterns that caused investors to lose sleep in 1987, in 2001, in 2008, and in 2020 are alive and well today.}

^{I’m not writing this to be discouraging. I’m writing it because pattern recognition is one of the most valuable things four decades in this business gives you. If I can help you see a mistake before you make it, that’s worth more than any portfolio rebalancing I’ll ever do.}

^{Here are the five I see most often — and what to do instead.}

^{1. Chasing Past Performance}

^{Every bull market produces the same conversation. A client calls, excited about a fund that returned 34% last year, and wants to move everything into it. What they don’t realize is that by the time a fund appears on a “best performers” list, the conditions that produced those returns have usually already passed.}

^{Past performance is not a predictor of future results. That’s not a legal disclaimer — it’s a documented empirical fact. Studies consistently show that last year’s top-performing funds underperform the market on average in the following year. The investors who piled in late are the ones holding the losses.}

^{A fee-only fiduciary builds your portfolio around your goals and risk tolerance — not last year’s headlines.}

^{2. Ignoring Tax Drag}

^{Most investors focus on gross returns. They should be focused on what they actually keep after taxes.}

^{Tax drag — the cumulative impact of taxes on investment returns — is one of the most overlooked threats to long-term wealth. A fund that returns 9% annually but generates significant short-term capital gains distributions may leave you with a real return well below what a tax-efficient alternative would produce. Over 20 or 30 years, the difference compounds into a number that would make most investors uncomfortable.}

^{Asset location strategy, tax-loss harvesting, and careful timing of distributions are all tools that a fee-only advisor uses proactively. A commission-based advisor rarely brings this up — there’s no product to sell around it.}

^{3. Commission Product Traps}

^{I’ve watched clients walk into my office carrying annuities, whole life policies, and proprietary mutual funds they didn’t fully understand and couldn’t easily exit. In every case, they were sold these products by someone who earned a commission for doing so.}

^{That’s not a coincidence. Commission-based advisors are structurally incentivized to sell products that generate revenue — sometimes at your expense. High fees, surrender charges, and unnecessary complexity are the fingerprints of a commission-driven recommendation. A fee-only fiduciary earns nothing from what you buy. That changes everything about the advice you receive.}

^{4. No Written Financial Plan}

^{Discipline without direction is just activity. I’ve met intelligent, hardworking people who have saved diligently for decades with no written plan tying it together — no target, no strategy for distribution, no coordination between their investments and their tax situation.}

^{A written financial plan is not a luxury. It’s the difference between making intentional decisions and reacting to circumstances. It gives you something to return to when markets get noisy or life gets complicated — which it always does.ing.}

^{5. Emotional Decisions at the Wrong Moment}

^{March 2020. December 2018. October 2008. Each of those months produced a wave of investors who sold at or near the bottom, locked in their losses, and missed the recovery that followed. Emotional decision-making in investing is expensive, and it tends to strike at exactly the wrong moment — when fear is highest and clear thinking is hardest.}

^{Having a trusted advisor whose job is to keep you anchored to your plan — not to generate transactions — is one of the most undervalued protections in investing.}

^{The Pattern at a Glance}

Mistake	Likely Consequence	Fee-Only Fix
Chasing past performance	Buying high, selling low	Goal-based portfolio built around your timeline
Ignoring tax drag	Significantly reduced net returns	Asset location + tax-loss harvesting strategy
Commission product traps	High fees, poor fit, limited exit	Unconflicted advice with no product incentives
No written plan	Reactive decisions, missed coordination	Comprehensive written financial plan
Emotional decisions	Selling low, missing recoveries	Ongoing advisor relationship built on discipline

^{The Pattern at a Glance}

^{“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.” — Proverbs 21:5}

^{I’ve quoted that verse to clients more times than I can count — not because it’s a financial planning verse, but because it’s a human nature verse. Every mistake on this list has a version of hastiness at its root. Chasing returns is hasty. Skipping a written plan is hasty. Panic-selling is the definition of hasty.}

^{Diligence — in Scripture and in investing — means slow, intentional, consistent action aligned with a long-term purpose. It is not exciting. It rarely makes headlines. And it works.}

^{What a Free Portfolio Review Covers}

^{If any of these mistakes feel familiar, a portfolio review is the right starting point. In a single conversation, we look at:}

• ^{What you currently own and whether it reflects your actual goals}
• ^{The tax efficiency of your current holdings}
• ^{Whether you have a written plan — and if not, what it would take to build one}
• ^{Any commission-based products that may not be serving you well}

^{There’s no charge for the initial conversation, and no obligation to do anything afterward.}

^{→ Schedule Your Free Portfolio Review}

^{Related Resources}

^{If your review surfaces questions about what your portfolio is actually invested in — including whether your holdings align with your faith — our Faith-Based Portfolio Checkup screens your current funds against biblically responsible investing criteria.And if the bigger question is what happens to your wealth beyond your lifetime, our Estate Planning & Charitable Giving service covers everything from bequests to donor-advised funds — so your legacy reflects the same values that guided how you built it.}