Have you ever developed an unhealthy attachment to something, clinging to it even though you knew it might be hurting you financially?

Most of us have. Eventually, you probably realized that you had hung on too long. In one way or another, everyone has done this because it's only human. One reason we hang on is because we've invested so much time, effort, money or all three.
With investing, this is all too common. Wanting to believe that we were justified in making an investment, we stay with it, even though the prospects of profit may now be dim.

In business and finance, this is referred to as "sunk costs" — those that you may never recover. Clinging to something solely because you've invested in it makes no sense. But this happens all the time. Behavioral economists call this the sunk-cost fallacy: Just because people have invested so much time or money, their faulty reasoning goes, they hang on to the investment no matter what.

Of course, this is often a recipe for loss — and it's a major factor affecting success in investing. Investors initially form a view of a stock's prospects based on something they've heard or read, and resist re-evaluating this move because they cling to the belief that they were right in the first place. Simply admitting they were wrong is difficult for many.

As they age, many people naturally begin to focus on their wills. While planning your bequests is always a good idea, people often overlook a crucial option: Instead of using a simple will, use a will with a built-in trust.

In many cases, with the guidance of a qualified attorney, a trust can be more effective than a simple will in achieving your estate goals, and provides far more flexibility for changing life circumstances. The provision in wills that does this is called a testamentary trust. You can't incorporate these into a simple will. Instead, you need what's known as a normal will.

There's a good chance that someday you'll receive an invitation in the mail, or receive a phone call inviting you to a "free lunch" seminar from someone in the financial services industry.

And, after you've sat through what is often a slick presentation by a very well-trained salesperson, you're then rewarded with lunch or dinner. This is then typically followed up with numerous attempts to set up an individual appointment either in your home or at their office, with the ultimate objective of selling you an annuity. If you're 50, you've probably already had this experience.

The stock market is strewn with minefields that can blow up your investment portfolio-if you let them.

Often people are led to these mines by misconceptions derived from the assertions of market players, which you should make every effort to disregard. This is tough because there are so many of them, and they're often repeated in the financial media.

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