Having an investment is good for your future since you will have something to lean on should there be any problem with your current source of income. However, along with the line of investment, mistakes may happen. These mistakes could be due to having one’s investment decision being influenced by their emotions or not understanding how various factors such as political and economic affect investment. Here are the common investing mistakes that you should avoid at all costs.
Not having an investment goal
One should have some goals as they set out to invest in a particular market or startup business. This will help you move towards achieving one’s goals. These goals should include the time frame for accomplishing these goals and how much risk one can tolerate. This also means that one should not have frequent adjustments on their portfolios.
Do not be led by emotions
Pessimism and optimism affect us as humans. These also influence how the market behaves. Getting yourself too involved in the market trends by buying and selling too soon ends up causing high buy and low sale cycle on your investment. One should always stick to why they invested in the first place. They should evaluate whether their plans have changed. One should venture in investing in medium and long term goals and do away with having cycles.
As this adage goes, do not put all your eggs in one basket, so is an investment. Not diversifying is recipe for disaster. One should ensure they allocate their funds to be used for different assets. They should not rely on the performance of one asset only. It is important to spread the risk.
Doing speculative investment
Most people are influenced by euphoria and end up buying what may not be the best thing for them. Speculative investment is where one buys something in the hope of making quick bucks from it. This is mostly influenced by the current market trends. This is always a recipe for disaster because within a very short time one will notice that was not the best thing to do.
Comparing unrelated investments
This is like comparing apples to oranges. Such comparisons may make one to diverge from their initial goal, which if they would have been patient enough would have borne great fruits. One should avoid comparing such investments since it will only end up harming their investment goals.
Changing investment direction frequently
One should stop looking at their investment in a short term view. This happens to those who have medium and long term goals. This makes them change their investment direction frequently. One should always know that there will be no index which will compare with their personal portfolios.
Don’t take too much media attention
The media mostly reports the sensational and negative news. If one base their investment decisions on such news they will make the worst investment mistakes.
One should study the market trends of the various industries they want to invest in and analyze them before they put their hard-earned money.