Before choosing a Company or business to invest your money in, there are some investment errors you need to be aware of in order to guide against the mistake of making a bad investment or loosing all your capital. Below are some of those errors:

1) Focusing more on the Company's stock price movements instead of the business progress of the Company: This is one of the most common errors investors make when deciding on the best Company to invest in.

This is because, it is the progress of the Company that will determine the price of the stocks, i.e if the Company is not doing very well, then their stock price will fall. But if the company is doing very well, the stock price will rise.

2) Investing in a Company with a lot of debt: This type of error, if not avoided will surely guarantee you loosing all your investments.

This is because, a Company that has accumulated a large sum of unpaid debts can easily declare bankruptcy and when this happens, your investment in that Company will be lost.

3) Taking loans to invest: This type of investment error is usually made by investors who have very high expectations about a Company's stock price. They loan money they can't normally pay back to purchase the Company's stocks.

This can backfire because, the stock market can change very quick depending on the situation. And if the price does not rise as they expected it to, they not only lose their investment, but they also find themselves in debt as well.

4) Inadequate information about the management capabilities: It is best to find out how the Company you wish to invest in is being managed. Because, if there is improper management of the Company, that Company will not progress and as such, the stock price of that Company will surely fall which will result in your investment being lost.

5) Hasty selling of stocks: Selling is stocks should only be done when the Company is no longer showing signs of progressing.

If a Company is doing very well, then the stocks should be retained because, a Company that is progressing always guarantees a rise in the stock price.

In conclusion, before you invest in any Company, always create time to carry out proper research about that Company in order to avoid regrets later.

Lina555:
Thanks for such a useful and informative post. I really want to start my own company but I don't have enough money, so I'm thinking about getting one of those personal loans for the unemployed https://theguaranteedloans.com/personal-loans-for-unemployed/. According to my business plan, I'll be ready to pay it off in a few months. But having read your post, I see that maybe this is not a good idea, although I don't see another way out.

The only guarantee you have in taking a loan to start a business is that you are going to pay back that loan. It doesn't matter if the business isn't generating returns as expected, the bank must get back their money.

What if the business does not go according to plan (which is common with most new businesses), how are you going to pay back the loan?