5 Mistakes Investors Should Avoid During Financial Crisis.

CHICAGO -- Investors are wired to make the wrong decisions. Especially in a difficult market, people sell when they should buy and invest when it's time to sell. Stuart Kruse, founder of Kruse Asset Management, a prominent Chicago-based investment house, details 5 common investment mistakes that will cost you money:

1. Panicking. Despite the financial "crisis" which is affecting very specific firms, the world is not coming to an end. Most financial stocks are actually doing well since the July 15th lows.

2. Selling. When the markets are in a long decline it's easy to believe the decline will never end, so most people have the urge to sell. But, just as markets don't rise endlessly, they will not fall forever. Be wary of selling just before a market upswing.

3. Not buying. If your favorite wine was on sale at a 30% discount, wouldn't you want to buy as much as you could? Stocks are no different. Warren Buffet, arguably the best investor of all time, buys during crisis, and today, he's investing billions in the firms many are running from.

4. Listening to media hype. The media's interests are not aligned with yours. The media is interested in increased viewers and will highlight extreme situations with experts holding the most dramatic views. After all, the norms are boring. Be an informed investor, but keep the stories in perspective, even the latest "crisis" may not affect your long-term goals.

5. Becoming emotionally invested. Emotional decision-making leads to poor choices. Whether it's fear, greed or insecurity, if an emotion is guiding your financial choices, odds are those choices are bad. Passion is great in romance, but when it comes to your finances, the more ice in your veins, the more bread in your pocket.

Market turn-around changes investor sentiment, not vise versa. Those investors waiting for a signal of change will have missed an opportunity to capitalize on the bounce back.

Kruse designed the Quantitative Value Portfolio, a breakthrough model for investing that, since its inception, has outperformed the S&P 500 by approximately 80 percent of any 90-day period. Kruse established his career at Bear Stearns & Co., where he developed the QVP, and Lehman Brothers, before founding KAM. For more information, visit www.kruseassetmanagement.com.