Mistakes Not To Make

By | September 21, 2013

Delete "MISTAKE"

Investing is not a game but it can become very addictive you need to understand some basic requirements so that you are better equipped and don’t make repeated mistakes.

Blind

Going into the stock market blind is a big mistake. Yes there are people that have gone onto the stock market and have started to build a portfolio without the slightest piece of information. Some people are lucky and have made money; the majority fall flat and loose the capital.

It is important that if you are looking to grow money then you need to know how to do this. You need to read all the information that you can prior to investing. This information can be sourced from books or there are many sites online that will provide you with information. Until you understand what your aim is and how you are going to achieve it you might not be quite ready to take the plunge.

Following

Just because a friend has had success at one aspect of the investment market doesn’t mean they know everything. It is not good advice to follow the lead of another investor without doing your homework first. It could lead you to losing your capital and a friend.

Dividends

Choosing a product just because in the past it has paid the dividends does not mean that this will in the future. Make sure you understand the item that you are choosing to invest in before you take the plunge. Work out if you think the performance will continue. If the price is low it doesn’t mean that it is a good product to purchase. Again it is important that you do your homework on the company first before you make any purchases.

It is also not a great idea to chase top performers and always being too far behind to reap any rewards. Do your own research and stick to what you have learnt and not just follow regardless. If others have made money on their portfolio then it is great for them, but it might not be the best item for you and you need to focus on your investment plan, making sure that your portfolio fits with what you have already decided to do. An investment plan can be altered and should be checked regularly, but don’t alter your plan to suit your investing.

Time

If you are a first time investor you will be aware that you will need time for an investment to grow. It is not about the short term prospects but the long term. But it is also important that you are able to let go of an item and move onto the next before you lose all your capital. It is about getting the timing just right, not holding on too long and at the other end of the scale moving too quickly from one investment to the next.

Therefore it is vital that you do your homework first and make sure that you are following your investment plan.

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