To err is human: to identify, blissful.
Mistakes are natural and even investors make a few of them. The uncomfortable part of life is that you tend to learn more from your mistakes than your successes. But as long as you are learning and growing, it's all good.
During the initial phase of investing, people mess up. If you are one of the beginners and you want to learn from other's mistakes, this article is for you. It gives away some hard-earned investing lessons you need right now.
Not only the newbies, but even the expert investors make mistakes while picking up stocks. The more you learn to identify the red flags, the better your portfolio becomes. After all, investing is all about practice and experience.
ERROR 1: BEING UNSURE OF INVESTMENT
The first piece of advice is to make your mind before you invest. If you have even one percent doubt whether you are ready or not, STOP and Think again.
Buying stocks is not a shortcut to earn quick bucks. Do you have to pay high-interest debts? Most loan interests are usually higher than the stock's annual returns.
Make sure you have emergency funds before buying stocks. Invest to enhance your financial goals without having an unrealistic expectation.
ERROR 2: NOT UNDERSTANDING WHAT YOU ARE BUYING
Don't be one of them who buy stocks only because the company name is cool. Or they have heard someone else talking about it. Even if someone besides you has earned a huge profit from a stock that you don't understand well, don't rush to buy it.
If you use a certain product or service in your daily life, you know the brand and you understand how it works. Pay attention to the news about the particular stocks you want to buy. Do as much research as possible and trust your instincts.
ERROR 3: NOT HAVING PATIENCE
Do you think stock is something where you can find great deals to generate wealth immediately? Unfortunately, it's far from reality. When you are a novice investor, it will take a while to taste the potential success you want. Don't be one of them who loses patience long before the actual growth starts.
Patience is the key to success when you are investing in stocks. The longer you hold a stock, the more money you will be able to make.
ERROR 4: LETTING YOUR HEART TAKE OVER YOUR BRAIN
Many new folks invest based on their greed and excitement. But it is a world of hardcore business wisdom and you need to tame down your emotion. The market could crash without warning and ruin your hope. Many first-timers sell their stocks out of panic when the market drops.
Don't let your emotions impact your investment decisions. You might lose more than you gain in the long run. Study how the market faces ups and downs before participating in the real game.
ERROR 5: QUANTITY OVER QUALITY
This is one of the largest mistakes investors make especially after winning a few deals. When quick money is all you think about, your focus shifts from quality deals. As a result, they often miss out on great deals.
You must avoid the temptation to focus on quantity. Though it's hard, it is a smart step in the long run.
No matter how good you are at making investment choices, if you have no framework or prior research, it won't work. Proceed with a broader goal in mind to make a huge impact on your finance and growth.