If you’re new to the world of stock market investing, you might not be familiar with some of the common mistakes made by investors. Although these mistakes have been made over-and-over again, and although these mistakes have been written about time-and-time again, stock investors continue to ignore these common pitfalls. This post will bring these pitfalls to light so that you can avoid making the same mistakes.
3. Overconfidence – It is natural for investors to gain confidence as their experience increases. And, confidence is not a bad thing! However, getting too confident can actually blind you. You don’t want to miss important trends in the market because your head is in the clouds.
2. No Plan or Objective – Why risk your hard-earned investment dollars by simply hoping for the best? Create an investment plan and objective. Why are you investing in the first place? What is your risk tolerance? This certainly doesn’t have to be 100-page document. However, you need to have some sort of guide to help you reach your end goal.
1. Emotional Investing – Don’t let your emotions take over. If you invest in a relatively strong and stable stock but happen to get your timing wrong, don’t jump ship just because the share price lost value. Create a plan for buying down the share price. Or, set limits for your losses.
Evade the trap. By avoiding these common mistakes early on in your investing career, you will be on your way to investing with success.