The 7 Dumbest Mistakes You Can Make When Investing
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Try to avoid these 7 dumbest mistakes you can make when investing at all costs
If you're new to investing or Trading the Financial markets, you can be forgiven for making a few rookie mistakes along the way. If your financial knowledge isn't too hot, here's a heads-up of the 7 Dumbest mistakes that amateur investors usually fall into: you can save yourself some money if you
1. Don't sell in a panic
Easily one of the most common mistakes new investors make is getting cold feet and selling only days, weeks, or months after making an investment because prices have taken a dip. Newsflash: short-term dips and losses are inevitable. Don't let fear guide you.
2. Be flexible
Other investors feel they must hold the stocks they've set their mind upon, even if all reason is clearly telling them to sell. Holding through short-term losses is an important skill, but so is being prepared to sell earlier than expected.
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3. Don't put all your eggs in one basket
Even with a relatively small amount of money, you shouldn't put it all on one horse. Try to round out your portfolio with investments in a few different industries and geographic locations.
4. Don't over diversify
Assuming you're not managing a fund, you probably also don't need to be investing in hundreds of different stocks. It is possible to spread yourself too thinly, which means that when one of your investments does do well, you're not going to reap much of a reward.
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5. Keep your expectations in check
Remember that money made on investments is essentially money for doing nothing - if you're just starting out, any profit should really be accepted gratefully. Don't get impatient because your investments aren't seeing huge gains each month.
6. Consider your own investment timeframe
The type of assets you invest in should differ massively based on how long you're happy to keep your money invested for. Bonds and fixed-income investments are better in the short-term, whereas stocks and equity funds should only be considered for long-term investors.
7. Past success is not proof of future success
Found a stock that's grown by 200% in the past year? Don't count on it doing the same again. You could be making the mistake of 'buying high' and having to sell low. Remember that successful trading is about the future, not the past.
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