Investment Mistakes Every Investor Needs To Avoid!August 11 | Posted by Matthew Clark | Top Story
Throughout your investing career there is a very good possibility that you may make a few investing mistakes. However, there are big mistakes that you absolutely must avoid if you are to become a successful investor. For instance, the biggest investing mistake that you could ever make is to not invest at all, or to completely put off investing “until later”. You work hard for your money and it’s time that you make your money work hard for you – even if all you can spare is $20 a week! The amount you invest is neither here or there as long as you start disciplining yourself to put away money each month.
While not investing at all or putting off investing until later are big mistakes, investing before you are in the financial position to do so is another big mistake. It is extremely important that you get your current financial situation in order first before you begin investing. Try and get get your credit(s) cleaned up, pay off any high interest loans you may have, and put at least three months of living expenses away in savings. Investing can be a full time job on its own and it’s important that you don’t overwhelm yourself with the prospect of trying to make money in the markets along side the stress of paying down your outstanding loans or debts.
Don’t invest to get rich quick. That is the riskiest type of investing that there is, and you will more than likely lose most if not all of your money. If it was easy, everyone would be doing it! Instead of trying to “get rich quick”, start investing for the long term. This way you are giving yourself enough time to weather the storms and volatility along the way in order to let your money grow. Only invest for the short term when you know you will need the money in a short amount of time. BUT this means that your investment strategy must be different in the sense that you will need to stick with less risky investments such as certificates of deposit (CD’s), money market accounts, term deposits, etc…
NEVER put all of your eggs into one basket. Diversify your portfolio into various types of investments for the best returns. Also, don’t move your money around too much. Let it ride. Pick your investments carefully, stick with your investment strategy, and give your portfolio the time it needs to grow. Don’t panic if the stock drops a few dollars. If you invest in a strong stable company, the stock will go back up. Remember, that’s the nature of the game!
A common mistake that many people make is thinking that investing in collectibles will really pay off. Again, if this were true, everyone would do it. Don’t count on your coin collection or your book collection to pay your way through retirement!