With heads rolling at two of the biggest banks on Wall Street there is a lot of chatter about a recession occurring in 2008 and yet another bear market. Some of us who stayed painfully invested through the last bear market are looking back at the lessons learnt and are trying to position ourselves as best as possible for the future. The changes I made last year to protect the model portfolio from the bursting of the housing bubble have yielded results and I have accelerated this process in recent weeks by increasing our cash position, adding short positions and naked puts.
Looking over an ocean of fear and uncertainty where companies like E*Trade (ETFC) lose more than half their value in a single trading session, I am reminded of some of the worst mistakes that an investor who is just starting out can make. Given below is a list of 10 mistakes that even seasoned investors are likely to commit from time to time. While many of these classic mistakes should be avoided, the last one and the crown jewel amongst them should be avoided at all costs. So here goes,