Ric Edelman: Hi! I'm Ric Edelman. In this series we're talking about some of the biggest financial mistakes I've seen people make and here's a really common one, investing in the wrong way.
One is buying investments based on the past, you see, if an investment is really well that makes you attempt to want to buy it, so whatever you think, but past performance does not guarantee the future, but will be like saying that because it rained yesterday, it's going to rain today, we know that is not true. Here's a similar problem; buying an investment after it hits an all-time high, bad idea.
Look at real state, if you bought at the pick of the bubble in `06, you're regretting it now and the same thing with gold. Nobody wanted to buy gold when the price was low, but now that the price is high, it's all people talk about. It's much smarter to create a diversified portfolio with many types of investments.