These Four Investing Mistakes Will Hurt You

These Four Investing Mistakes Will Hurt You

The world is full of failed investors who entered the investment ring with high hopes, only to be knocked around like a Mike Tyson opponent in his prime. Investing is a risk, but there are several steps you can take to mitigate those risks. On the other hand, there are also many possible missteps and if you aren’t careful, you could end up hurting yourself.

Stay Clear of These Mistakes

So what big mistakes do you need to know about in order to avoid one of those vicious Mike Tyson blows that would knock you out of the investment game? Here are four big ones to stay away from.

1. Don’t Try to Time the Market – even though it sounds enticing, the get-rich-quick strategy of day trading is usually a losing proposition. It seems appealing on the surface. Who wouldn’t want to become an instant millionaire? However, trying to time the market is risky business and it usually ends up in big losses. Don’t try to time the market. Instead plan to invest long-term and grow your portfolio over time. This will lead to long-term sustainable growth.

2. A Lack of Investment Diversity – speaking of growing your portfolio, it’s also a big mistake to put all your investment eggs into one basket, so to speak. While investing a lot of your assets into one big winner can pay big dividends, you could also lose everything if something bad happens with that stock. Instead, look for several companies or sectors to invest in. This gives you a better chance for long-term success and it helps ease the inevitable ups and downs of the market.

3. Not Recognizing the Risk – the stock market comes with risk. It’s part of the game. Some investors make the mistake of getting caught up in the glamorous side of investing when things are going well. That can lead to the mistake of not properly recognizing the risk involved. Remember, you can lose everything just as quickly as you gained it. So be aware of the signs and know what to look for. Never overlook the possible risks.

4. Know What You’re Investing In – this might seem obvious, but many investors make the mistake of not really knowing what they are buying. They might buy into something because a friend or family member tells them it’s a good investment. Or, maybe they simply invest based on hearsay, or online commentary. Whatever the reason, you can’t afford to invest blindly. You should know about the company and about how it’s stock has performed. It’s your money so know what you’re buying with it before you dive in.

Invest Smart, Avoid Mistakes

The stock market can be an exciting adventure. If you play it right you can reap great rewards. But if you make these kinds of mistakes you could end up on the mat knocked out cold, figuratively speaking. In any case, avoid these mistakes at all cost and you’ll likely be pointed in the right direction.