Top 10 Biggest Investment Mistakes to Avoid
Investing is a primary need when we consider long-term wealth benefits but investing ‘right’ is more crucial. Any Investor goes through a turmoil of difficult choices before investing for the 1st time.
Making mistakes throughout your investing journey is a part of the learning experience that comes with it but at times the cost of those mistakes becomes too heavy.
Here is a list of mistakes to avoid that’ll transform you from an amateur to a pro in investing.
1. Trend-Setters Might Destroy You!
Striking an interesting conversation about the latest ‘trend’ in the market is something you’ll commonly experience in the world of investments. But how good is it?
That question itself will help you get through this 1st mistake. Never believe the word of mouth. When it comes to investing do your proper research and run all your numbers personally before following someone blindly.
Having an in-depth analysis of the pattern and trends is always handy. Trends may change according to charts but taking a wise educated decision is always in your hand.
2. Being Impatient will ‘Kill’ your Investment!
A seed takes to germinate into a sapling and a sapling into a tree. Similarly, patience in Investment is an essential key.
Taking millions of examples from successful investors around the globe, patience and real discipline are the basic necessities to become a greater investor. Understanding that returns do take time and letting them flourish in their own due time is also a skill.
3. Going in Without your ‘A’ Plan!
Having a clear vision and goal is of utmost importance. Hence, planning your investment ahead for maximum benefits is important too. Having unclear investment goals will not be profitable in the long run.
Pro tip: Make sure that you really believe in the business/service/product before investing in it.
This basically ensures that you have done your research right you can actually see investing yourself in the future with them.
4. Social Media is Not a Research Tool!
Every penny that you invest is hard-earned money. Believing and using Social Media platforms as your fact-checkers will let you towards your downfall!
Social Media is fast-paced and approachable, thus, there is no guarantee of authenticity behind any of the information that surfaces on it. Investing while taking advice from such platforms can prove to be one of your biggest Investment Mistakes!
Many pose as ‘Investment Experts’ too but remember the guru mantra for the future:
Number of Followers ≠ Good Investment Advisor
Therefore, it is better advised to be aware of such frauds and rather seek professional help from certified Advisors.
5. Learn to Break Up with Your Stocks!
The investment business is always filled with Ups and Downs. Falling in love with your stocks and not being able to move on is the worst mistake ever. You have to be smart about judging the patterns, statistics as well as making the right choices.
Falling in love with one of them will give birth to unnecessary bias-ness. Giving attention to one of them and not investing time and energy because it gives you more returns than others will hamper your other stocks.
6. Fantasy Expectations
Imagine investing 10% and getting 200% in return. Sounds amazing, isn’t it?
Well, it is as amazing as it is UNREALISTIC!
If inflation is high, FDs provide a higher return and if inflation is low, they provide a lower return. Equity funds will provide returns that are roughly in line with economic growth. Investing solely for high returns is usually a failure. Having unrealistic expectations will only hurt you and will never be fruitful.
7. Investing When You Needed It!
All good investors will always have their emergency money saved somewhere along with a daily cash flow. Then they have their savings amount which they redirect into their investments.
But then there are some who invest everything they have and suffer later on. It is a no brainer that all investments come with certain risks.
Profit and Loss can be unpredictable, so investing your daily cash flow or even your emergency money into this is highly risky and non-advisable.
8. Delaying Your 1st Step!
Making an educated decision is wise, but investing years behind it isn’t. The market keeps on changing every single minute and it doesn’t wait for anyone. If you want to be a pro at investing, you’ll have to take the 1st step to do i.e., INVESTING!
People do keep on running behind companies, switching from one to other, trying to have a settled life. But without having multiple streams of income this race will never end. Hence, investments are one of the top options to go for.
Investments not only allow you to pursue your daily job or multiple passions at the same time but also helps you save more time, energy, and money than expected.
9. Not Spreading Your Wings Enough!
Let’s say you have invested in a particular venture and for some reason, the industry goes down, what will you do? What if the only businesses you have ever invested in from the same field?
To answer all your questions in one word we can easily say Loss!
As an investor, it is profoundly essential for you to spread your areas of expertise. Investing in multiple fields has multiple benefits such as backups for situations like crises or epidemics.
10. Investment Vs Marketing!
This one is pure trickery that many investors take unnecessary risks, eventually taking out all their money to trash.
For any investor, it is absolutely crucial to understand the clear difference between a good investment plan and a good marketing pitch. Not all good marketing pitches will be good for your pocket.
Knowing the facts and unlocking the full potential of your investment is a talent that comes to you with experience and stays with you forever. So, beware of confusing a good marketing pitch with a good investment.
Although there are many more things that can go wrong while investing but the best way to learn is to dive into it and explore.
Happy Investing!!!