This is an article listing the most common but important mistakes commonly happening to investors, both experienced and beginners. I thought it will be a good idea of listing these mistakes for the knowledge
of blog readers. I found these are the regular mistakes investors committing today. These points have been taken from personal experience and general behavior from investing world.
1. Investing to equity without proper knowledge – As an investor, one should acquire enough knowledge to conduct personal research and study to know the profitability and fundamental strength of a company to decide whether need to invest or not. Any investor who doesn’t have enough time to research and study, not recommended to invest to the equity directly.
2. Investing based on hot tips, analyst reports or following public – Remember a truth, if someone found a treasure, he never share this with any one. Treat the tips, analyst reports on the basis of this.
3. Trading instead of investing – Short term trading never give you wealth. Long term investing in right companies is the successful approach practiced by world’s legend investors. Being a short term trader, you are losing huge amount through brokerage and short term capital gain tax.
4. Investing on penny stocks – This is the common mistakes I found with lots of investors. Some people always prefer penny stocks to buy because of its fewer prices. Remember, such company can be vanished at any time and the liquidity will be less.
5. Investing when the prices are high – There are two types of lose can happen with this point. When someone buying stock of a weak company with attractive price or buying stocks of a fantastic company with wrong price. As an intelligent investor, one shouldn’t commit to such mistakes. Well understanding on buying and selling time is must to be got rewarded with stock market.
6. Lack of patience – This is another mistakes generally and regularly found among investors – Those who have less patience and always thinking about loosing money due to market fluctuations, have higher chance to commit this mistake. Learning patience and selecting right companies in right time with long term focus is the solution to avoid such mistakes.
7. Investing in fast booming sectors – Remember, how people lost huge money by investing the internet stocks. Hot sector stocks will move up amazingly but, whenever the market bouncing back, remember, these stock will reach to the bottom as first. Real estate, construction, internet stocks are some of the best examples. The reason behind such behavior is the fundamental weakness of these companies.
8. Investing in IPO’s – This is the mistake committing by investors due to lack of knowledge. I thought this will be the right article to know more about this.
9. Marrying stocks – An investor never being perfect once if he knows all about the buying timing. Instead, he should be well aware the time when he can sell the stocks.
10. Holding a laggard stock – Holding a stock that running to lose and no probability to come up, is costly mistakes committing by investors who have lack of investing knowledge.
Above mentioned points are the top in the mistake category but it is not limited too. I thought, it would be nice if I share the same with readers. There are other points to remember but, comparatively, the above mistakes cost you more.
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