The most frequent mistakes of beginners and experienced investors.
Table of contents
Greetings to you, dear friends! Of course, almost every person has ever dreamed of passive and additional earnings. Skillful investing on the Internet will help you save your money from inflation and increase it. But for this you need to follow a number of simple rules and not make quite typical mistakes. In this article we will discuss with you private mistakes, both beginners and experienced investors.
The dream of big and easy money
Many novice investors look at the investment market through rose-colored glasses: they believe that they can earn quickly and a lot. Unfortunately this is not possible. When investing, you need to think soberly: chasing the mythical huge profits, you can easily lose what you have. Therefore, it is impossible to choose an investment instrument based only on profitability. It is necessary to evaluate its relevance and reliability.
To successfully work in the stock market, you need to constantly produce your own analysis of current trends. Competent decisions come only with experience. Therefore, for starters, many novice investors use a financial analyst who helps them select investment targets. This is good, but on the other hand, do not forget about the loyalty of the Russian proverb: "trust, but verify." Therefore, independently carry out the analysis and select the most acceptable options. Do not expect that you have found your personal golden calf and this is the end of your work. Depending on the expected profit, you sometimes have to come back to analyzing your own investments again and again.
Investing borrowed funds
It is logical that the potential profit of the investor depends on its working capital. Many novice investors do not have a large amount for the initial investment phase. Therefore, many are beginning to invest money that has been set aside for a rainy day, for surgery for relatives, for the education of children, etc. Some go so far that even a loan is taken for these purposes. Do not do this in any way! You can only invest free money, the loss of which will not affect your financial situation! Otherwise, you risk being left without means for existence. It is unlikely that any of us wants to stay at the broken trough, so it’s better that less, but yours :)
Following the wrong investment strategy
Initially, before entering an investment, you must define for yourself certain financial goals. What yield do you want to get? How long will you hold assets without selling them? How much are you willing to tolerate asset price fluctuations? All these questions you must answer. In addition, you must work out a certain investment strategy for yourself. You can not buy everything that catches your eye in a certain period of time. Every position in your portfolio should have a clear rationale. You can not rush from one extreme to another. Only by following a certain algorithm, you will achieve success!
Lack of diversification
In addition to a sound investment strategy, you need to choose the right balance distribution method. Equal amount of funds should be distributed between each asset. The most reasonable thing is to make 3-5% off balance for these purposes. Thus, in the event of an unfavorable outcome, you get the opportunity to restore your balance to its original state.
Margintail Strategy Game
Losses are inevitable. There are no people whose accounts have never subsided under the action of falling quotations. In order to minimize their risks, some investors apply Margintayl's strategy, which has migrated to the sphere of investment from the casino. Its essence is that when a trader falls, a trader enters a position with a sum significantly higher than the initial investment. With a favorable outcome, the profit from the deal should cover your disadvantages. But, what if the next deal is unprofitable, and behind it? That is why the strategy Margintale always leads in a minus!
Neglect of petty spending
An inexperienced newcomer everywhere is warned of spending too much on commission for a particular operation. Do not forget that the investment market is a highly competitive environment. Many official and reliable brokers offer minimal fees. Your task is to find the best offers. It often happens that small and seemingly insignificant spending at the beginning very painfully cuts the profit. Take care of your money and do not give them it is not clear to whom!
Lack of emotion control
A big enough problem for an investor with any experience is to control one’s own emotions. It is difficult to cope with the moment when the portfolio literally hides before our eyes as a result of the fall of the market. But, nevertheless, in this case it is necessary to gather your will into a fist and calm down. In addition to panic, you can not give in and excessive excitement. Excitement will lead to a drain on your balance faster, rather than even the steepest drop in assets. After the first successes do not give in to the insane desire to acquire everything as much as possible more and more often.
Avoiding contact with other investors
Some newcomers put themselves in the position of an information vacuum. They search for information on the Internet, read some chaotic investment tips and rules, and then impulsively enter into transactions. This is the longest way to gain experience based on your own mistakes. It is better to learn everything by communicating with your colleagues. Learn from the mistakes of others. Communicate and feel free to ask! Join our chat telegrams and subscribe to Our channel!
Instead of a conclusion
Good luck in the endless sea of investment! Be prudent and little emotional. Invest only in areas that are easier for you to figure out. Analyze and communicate. Avoid stupid mistakes and reckless actions. Stay with us! Subscribe to us on social networks and join our friendly company of investors :) Ask questions and share your opinion in the comments! Each message will not be ignored.