|Join Nairaland / LOGIN! / Trending / Recent / New|
Stats: 2,661,848 members, 6,251,943 topics. Date: Wednesday, 21 April 2021 at 12:46 AM
|8 Common Mistakes That Every New Investor Needs To Avoid by newbox3030(m): 8:11am On Jan 03|
One of the most interesting sectors of industry today is investment. This is the application of capital in a commercial process expecting to get a return. A person who engages in this type of activity is known as an investor. After performing some fundamental research, they commit their money into investments of various kinds expecting to make a profit. Examples of industries where they commit their capital include real estate, the stock market, the commodities market and the precious metals market. Some investors build fortunes and others fail in their ventures. The difference between these is that the winners make as few mistakes as possible while the losers' mistakes destroy their careers. Are you looking to enter this industry? Here are 8 mistakes that every investor makes. Learn them and prepare yourself to avoid them.
Having no plan
If you have no idea where you are going, any road will get you there. Many investors make the mistake of entering the investment industry without a plan for their activities. This results in complete failure or underperformance. If you want to enter the investment industry, you should have a comprehensive plan. Ensure that your plan identifies and explains your objectives and goals. It should also cover the risk that you are involved in as well as the benchmarks that you expect to achieve. Your plan should also indicate how you expect to allocate the assets in your portfolio. It should also indicate if you plan to diversify or not. With this kind of plan, you will be ready to invest and succeed in it.
Mismatching your asset allocation and your investment approach
Many investors enter the market while their investment approaches and asset allocations are mismatched. There are generally two approaches to investing. These are the long and the short term. The approach that an investor picks is determined by their objective. Those who are investing for retirement pick a long term approach while those who are looking for a quick profit use a short term approach. The one that you pick determines how you allocate your assets. Many investors pick long term assets vehicles expecting a quick profit. This is a mismatch that results in failure. Therefore, an investor should match their asset allocation to their investment time horizon.
Focusing too much on the financial news
Contrary to popular belief, there is actually very little that is on the financial news that can help you to perform better in investment. Many investors make their decisions based on the news and therefore fail in their endeavors. From a pragmatic perspective, if someone had a way to constantly make a profit in the investment market, would they advertise their strategy and stock picks on television for everyone to watch? Of course they wouldn't. They would simply stay silent and make millions while every other investor suffers. Thus, shut off the financial news and focus on your own investment strategy. Eventually, it will pay off.
Avoiding the activity of rebalancing
Rebalancing is an important activity that you should perform on your investment portfolio. When rebalancing, an investor returns their allocation of assets to the plan that they initially had in their original investment plan. It is a challenging activity to perform. This is because some of the assets that you sell off may actually be performing well. Your core asset classes may also be performing badly and the rebalancing forces you to buy more of them. It may seem like an exercise in futility so average investors do not do it. This results in long term failure. However, if you rebalance, your core investment asset classes can eventually take off and make you a fortune.
This is a very common mistake among investors today. They are unwilling to make investments today instead of tomorrow. It is important to make your investments as soon as possible. This is especially important when it comes to long term investments. Being proactive with your investments allows your capital to grow over time. In addition to that, one needs to make the investments a little every day instead of all at once. This allows for steady growth and eventual profit. Avoid making this mistake by making your daily investment activities automated.
Part of investment is being patient and holding your position until it pays off. Trends cause some unreliable investments to look attractive for a while. This can distract an investor from their long term positions to make their investment in the short term ones. In most cases, the trends end abruptly and the investor makes a loss. Thus, investors should avoid making this mistake. You should be patient, resilient and hold on to your position and overall strategy. This will result in eventual profits.
Why take a little of something when you can take a lot of it? This is the mantra that majority of investors use when picking stocks. Instead of diversifying their assets, they simply over-invest in one or two hot ones. If these stocks drop in value, the investors whole portfolio tanks. Instead of doing this, one should spread their capital over a wide variety of assets. This protects the portfolio from experiencing losses in case a number of stocks fall.
Trying to time the market
Many investors try to perform their investments according to whether the market is going up or down. They imagine that they are being strategic with these trades. They try to get in and out of the market and score a small profit over a wide variety of stocks. Unfortunately, this rarely or never works. Investment professionals understand that market timing does not work. There is literally no way to time the market such that you make money over its volatile rise and fall. The best way to invest is to have a long term strategy and let your assets survive market volatility. It is already proven that the stock market improves over time. Thus, with a little patience and resilience, an investor can make a handsome profit.
The Important Take Away
Investing, when done properly, can reward you handsomely. Billionaires such as Carl Icahn and Warren Buffet made their fortunes in the investment market. They avoided the mistakes that are indicated above. Therefore, if you want to build your portfolio, learn these mistakes and avoid them too.
52 Likes 14 Shares
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by DanoskiDaniels: 11:44am On Jan 03|
Make I follow be first to comment for the first time, who knows maybe my destiny helper may locate me here and decides to charge my life for the better
By the way I will comment on the topic later when I understand it better
16 Likes 1 Share
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by paulolee(m): 11:44am On Jan 03|
nice list though but having gone through all of that concisely, I would say being greedy and Procrastination are the major factors that affect investments this days..
some people still believe that being greedy is a good factor when investing because greediness have a link with taking huge risk and gambling future expectancies..
Some rich investors do say, u can't get to the top without making risks and some risks do entails you being greedy..
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by Chatflick(m): 11:44am On Jan 03|
Happy Sunday Y'all
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by JessetariahMD(m): 11:44am On Jan 03|
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by Fidelismaria: 11:44am On Jan 03|
Lols people dey vex ooo
Anyways still FTC
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by GIANTPLUSHUB: 11:44am On Jan 03|
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by johncrested: 11:45am On Jan 03|
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by MrHighSea: 11:45am On Jan 03|
this year go hear am.
Investors go rock am.
we move forward
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by Muhylonaire007: 11:45am On Jan 03|
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by hellohgy(m): 11:46am On Jan 03|
One advice I will give anybody planning to invest this year is to try as much as possible to invest in CRYTOCURRENCY.
Bitcoin is currently at 33k dollars, and it is still pumping.
In fact financial specialist predict BTC hitting 100k dollars this year.
imagine if you had bought BTC at 20k dollars.....
There is never a late time to enter the crypto market.
Crypto currency is the way...
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by Emeskhalifa(m): 11:47am On Jan 03|
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by holuwajobar(m): 11:47am On Jan 03|
All this rubbish must stop
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by bayelsaowei(m): 11:47am On Jan 03|
This is information for ordinary citizens..if we were nigerian politicians all we need do is just pocket state allocations or constituency funds and voila we get short term results ..
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by blinking001(m): 11:48am On Jan 03|
Last year I made a mistake investing in people. I learnt the hard way. There is this tendency of people to fail especially when the expectation is high. Poor people are also too difficult to please. Lessons of 2020
10 Likes 2 Shares
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by bhouze(m): 11:48am On Jan 03|
I have a concise plan to start piggery this year. I have identified my market and the distribution chain. I have gotten a peice of land for that. Where i am stranded now is how to raise the pen to at least 6ft. Price of cement now is . I can't afford it since i will be needing like 800k to achieve that.
God will see us through.
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by Mtola8: 11:48am On Jan 03|
Good day guys and happy Sunday..
I'm trying to be productive this year hence I am acquiring some skills online cause I have no one to teach me and no money to pay them. I'm presently learning Photoshop manipulation, Adobe premiere (video editing), Adobe effect. I solicit for videos and tutorials on Instagram and YouTube. it's data consuming and I can't sustain such expenses as I hardly have any money. I really have the zeal as I am already getting better at it. my data is exhausted and I'm presently using the free opera mini mb to send this message. Anyone who God touches should please help me with data, I really need to push myself out of my current state. God bless
4 Likes 2 Shares
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by Esseite: 11:49am On Jan 03|
Always pick a line you know too well or willing to go the whole nine yards for.
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by holuwajobar(m): 11:49am On Jan 03|
Na 2021 we dy....
Rubbish from 2020 must stop
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by Yusfunoble(m): 11:50am On Jan 03|
Jumping into market they have little or no knowledge about.
Not learning emotional and risk management (it will end in tears)
Not having a clear cut strategy, or having one and not following it.
Believing the financial market is a get rich quick scheme (it will end in premium tears).
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by Taiwojon(m): 11:50am On Jan 03|
having said the above
2.aviod fornication and lust
3. avoid adultery and pornography
4. avoid lying
5. avoid cursing and abusing
6. avoid immoral lifestyle and dressing
7. avoid smoking and drunkeness
8. avoid dishonesty and every appearance of sins and give your life to Jesus
happy first Sunday of the year
Jesus love you. Jesus save
18 Likes 1 Share
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by azraeljaheel(m): 11:51am On Jan 03|
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by inoki247: 11:52am On Jan 03|
Well what about MMM investors nd co
1 Like 1 Share
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by JoeEeL(m): 11:53am On Jan 03|
9. Not knowing who to coattail.
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by TheGiftedOne(m): 11:53am On Jan 03|
I love this topic
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by AuwalYusuf812(m): 11:53am On Jan 03|
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by DropsMic(m): 11:55am On Jan 03|
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by Womanizer(m): 12:00pm On Jan 03|
Do not invest in a company that does not have trade history.
Always do your due diligence before investing your money!
|Re: 8 Common Mistakes That Every New Investor Needs To Avoid by Kobicove(m): 12:03pm On Jan 03|
If they promise to pay you ROI of 30% after 20 days just know that there is a dead rat somewhere
|Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health |
religion celebs tv-movies music-radio literature webmasters programming techmarket
Nairaland - Copyright © 2005 - 2021 Oluwaseun Osewa. All rights reserved. See How To Advertise. 104