Page 32 - Mumme Booklet

DRAFT

COMMON INVESTMENT MISTAKES

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taking a thoughtful, disciplined approach to investing is usually better in the long run and helps avoid some
common mistakes that investors often make such as:

Straying from the fundamentals (not having goals, not diversifying, not rebalancing)

Overreacting to media, market or economic conditions (trading too often, buying high/selling
low, no due diligence)

Lacking long term focus (day trading, speculating, averaging down, buying bargains,
chasing yield)

Not understanding tax consequences or inflation

Trying to 'time' the market (staying out or not starting at all)

One of the most common mistakes, timing the market, is a tempting thought. However, timing the market
consistently is extremely difficult and can often lead to a significant opportunity loss.
The following graph illustrates the returns investors would have achieved if they had invested for all 5,031
trading days versus missing some of the best days in the market.

Risk of Missing the Best Days in the Market 2000-2019

6.00%
4.07%
4.00%

2.00%
0.52%
0.00%
-2.00%
-1.79%
-4.00%
-3.77%
-6.00% -5.59%
-8.00%
-7.23%
-10.00%
Invested for Missing 5 Missing 10 Missing 15 Missing 20 Missing 25
All Trading Best Trading Best Trading Best Trading Best Trading Best Trading
Days Days Days Days Days Days
Prices from 2000 to 2019. Stocks are represented by the S&P 500. Source: 2020 Bloomberg.
About the data: Stocks in this example are represented by the Ibbotson® Large Company Stock Index. An investment cannot be
made directly in an index. The data assumes the reinvestment of income and does not account for taxes or transaction costs.
All investments carry risk including potential loss of principal and no investment strategy can guarantee a profit or protect against
loss in a down market.
Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
This plan is not complete without the Assumptions and Disclosures pages appearing at the end.
3170326-1-4 January 29, 2021 Page 32 of 108