Making mistakes is human, and mistakes are sometimes necessary to get better. But when it comes to your pennies, mistakes can cost you dearly – literally. And that’s a shame. After all, we started investing to make money, not lose money! In this article, we list the 5 investment mistakes that many beginners make, which are actually very easy to avoid. Read, learn and invest!
Mistake #1: waiting
“Hm, maybe now is not the right time.”
“I can start next month, too.”
“I think the economy is pretty ominous.”
“But what if a recession suddenly arrives?”
“So what should I invest in?”
You just cannot know, Susan! Because nobody has a crystal ball, not even you, not even the most seasoned stock market gurus. As Warren Buffet says, “A person sitting in the shade of a tree today, planted a seed 20 years ago.
Start. Beginning. Start small. But start! There is no better time than now. Hup into that action mode! Yes, those stock markets are going to crash, that’s what they do. But the stock markets are also going to rise again, because that is what history has always shown. Especially as the population continues to grow and people continue to innovate, develop and invest.
Mistake #2: Trying to time the market
Just don’t. This is a utopia. I read the other day that “one” had done a study: at the beginning of a 12-month period, they had 5 stock market gurus designate a company that they expected would grow tremendously and thus increase in value substantially. They had 5 monkeys do the same thing (I’m not kidding), who thus randomly pointed out companies. The monkeys turned out to be right more often than not ;-), that says it all right?
The market cannot be timed. Markets are irrational and volatile. Rise and fall. Get in, start, and let time do its work. Cause: Time in market beats timing in market.
Mistake #3: not taking small costs into account
Many parties who want to invest before you lure you with low fees and convenience. But low cost is not always low cost. Whether you pay 1% or 0.5% per deposit seems like fiddling around the edges, but can ultimately make a huge impact on your returns. So pay attention to the little ones when investing. The most commonly used fees in investing are management fees, transaction fees, connection fees, foreign exchange fees. Check this carefully.
Mistake #4: emotions
Your emotions are often something to take seriously in life. Except in investing. Don’t let emotions guide you! Many investors, including non-beginner investors, do. Just look at what happens when there is another news around world politics, a virus or other issues, people are afraid it will impact their investments. And then what do they do? Sell shares en masse. And what happens when mass sales occur? Right, then the price drops. And what happens if the price suddenly drops significantly? Then even more people want to get rid of it, because “oh recession!
The rule ‘
buy low, sell high’
is often forgotten because of all the emotion. Going along with hype, buying stocks at their peak and wanting to get rid of them when they drop in value. Not going to do it ladies! When there’s blood in the streets, it’s time to buy! So keep your cool and, above all, don’t let it drive you crazy. Steady investing and holding these investments for the long term is the magic trick.
Mistake #5: impatience
Another one of those. Either you have a nose for it, or you’re very lucky, but in general time wins out over speed. History shows that despite crashes and crises, the economy has always recovered, and so have stock prices. Each time they rise above the previous level. Be patient. Let time do its work, and take advantage of the interest-on-interest effect. Investing is not to make short-term money, you do that in the office, but to long term grow your wealth. Well, you can also go for wanting to grab fat bangs in the short term, but then you run a lot of risk, and there is a rather strong possibility that you will lose your wealth rather than grow it.
5 investment mistakes you can avoid too!
If you try to avoid these 5 investment mistakes as much as possible, keep investing steady periodically – with money you can spare for the long term – with a very wide diversification (for example, by following the global economy by investing in funds or ETFs) and keep your costs low: you should see what you have created for yourself in 10 or 20 years!
Are you new to the world of investing? Then read this article on starting to invest.
