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Last week, I introduced you to the first six mistakes people make with their money. Here, are six more common pitfalls when it comes to managing your finances and saving for retirement.

No. 7 -- Putting all your eggs in one basket -- Another mistake I hear a lot is, "My company has a share purchase plan and most of my retirement savings consists of my company's shares." Or, "I just put everything into a single index fund."

Even with retirement many years away, it is reckless to have a large portion of your savings in one investment. I can't stress enough how important diversification is, not only between different equities, but between different asset classes (equities, bonds, cash, etc). Look no further than those poor employees of Nortel or Enron who had their entire nest eggs in their employer's stock completely wiped out. You are far more likely to get better performance out of a diversified portfolio in the long run that betting on one company or one asset class. Not only that, but you would be doing such with far less risk.

No. 8 -- Being too Aggressive -- When it comes to long-term savings, slow and steady wins the race. Are you aware that if your portfolio drops 30 per cent in one year you need to make 43 per cent the next year just to get back to even? You do not need to hit a home run with every investment. As a matter of fact, depending upon one's risk profile, the importance of not losing money may trump the importance of making money.

No. 9 -- Being too Conservative -- Yes, being too aggressive is a dangerous proposition, but being too conservative can be just as risky. With GIC rates at historic lows, these type of investments are not even keeping pace with inflation. At one time conventional wisdom was to shift all of your assets to very low risk investments as you approach retirement. Unfortunately, low risk correlates with low return. It does not take a financial genius to figure out that if you are withdrawing five per cent each year from your portfolio for lifestyle, and are earning three per cent per year on your investments, you risk running out of money prematurely. Work with your financial planner to determine the appropriate asset allocation for your particular situation.

No. 10 -- Investing emotionally -- "Buy Low, Sell High!" We've all heard that expression many times. Unfortunately, when it comes to investments, what ends up happening all too often is the exact opposite. As markets climb, investors begin pouring money in. When the markets drop, investors panic and sell their holdings. As financial advisors, a big part of our role is helping clients take the emotion out of investing and try to avoid the emotional knee-jerk reactions that deviate from the plan. Make a plan, follow the plan and when you hit a bump in the road, stick to the plan.

No. 11 -- Chasing performance -- Many investors select asset classes, managers and specific investments based on how they have performed recently. Nobody wants to feel that they are missing out on a great investment, but you can't invest by looking in the rear view mirror. The future performance on an investment does not necessarily correlate to past results. What is hot today may be cold tomorrow (as a matter of historical fact, this is usually the case.). What to do? Stick with your investment plan and rebalance, which is the exact opposite of chasing performance. Rebalancing is the process of returning your portfolio to its target asset allocation as outlined in your investment plan. Rebalancing is not easy to do, as it forces you to sell your best performing asset classes and buy more of the underperforming asset classes. Ignoring rebalancing can let your portfolio become over-exposed to one asset class and potentially exposed to more risk than you realize.

No. 12 -- Retiring too early -- Many people underestimate how much money they need to support them in their retirement years. As a population, we are living longer and retirees are more active then ever before. A person retiring at 60 would need to plan for a retirement lasting anywhere from 25 to 40 years. This is a significant departure from the past. Additionally, there are other risks to consider at retirement, including inflationary pressures, a downturn in the economy, and/or a downturn in the markets.

You face all of these risks at a very delicate time, as you are in the process of drawing down income -- meaning there is less in your retirement pot to counteract these risks. Postponing retirement will enable you to postpone drawing down funds, and as well will allow you an extra year or two to augment your savings. Thus, every year retirement is delayed will have a major positive impact on your nest-egg. First of all you are not spending your savings -- meaning your investments keep compounding. Plus, you have another year to add to your war chest. And finally, you presumably have one less year that you will require retirement funding.

Avoiding these common mistakes will go a long way to helping you achieve your goals.

The information in this article is not intended to constitute legal, financial planning or investment advice, and it may not be relied upon for such. Please seek specific professional advice with respect to your particular circumstances, as each client's financial situation is unique and solutions may vary.

The strategies discussed herein are general. Mutual funds are not guaranteed and their values fluctuate on a daily basis. Investments may decline in value and investors may or may not receive back the original amount invested.