Not realizing when to hire professional help.
Thanks to those who have sent me stories of your greatest investment mistake, as I requested last week. (If you have not yet done so, I can be found at firstname.lastname@example.org.) The tales will appear in upcoming columns.
Today’s account, however, was not a submission. Rather, it was supplied by Wednesday’s The Wall Street Journal. In October 2008, as stocks languished near their 20-year bottom, Marty Bannon—the father of White House Chief Strategist Steve Bannon—sold his entire stock portfolio. This, we can surely agree, was an investment whopper.
Let us count the ways:
1) At the time of the sale, Marty Bannon was in his late 80s, and was 100% invested in equities. His only other asset was a small house. (Presumably, he also received monthly Social Security/pension payments.)
2) That 100% in equities was placed into a single stock, AT&T T .
3) Bannon not only attempted to time the market, but did so in the most dramatic and drastic possible way, by going from fully invested in stocks to owning none at all.
4) This decision was not made after consulting a financial advisor. Bannon had no financial advisor.
5) This decision was not made after discussing it with other, nonprofessional parties.