Skip to main content

Common investing mistakes


When trying to learn any skill and reach excellence, mistakes are the natural part of process. There is no way around it, but beginner investor are usually more prone to making these mistakes. Even famous and successful investor have made some of these mistakes at least once. We will look over some of the most common mistakes in hope to raise awareness among future and current investors and help them avoid repeating them.

First of all, investing in business and industry that you don't know that well is not a good idea. There is always some "hot" and "up and coming" industry sector but if you don't have much knowledge about that particular industry and don't understand its business model avoid it. For example crypotocurrencies were massive hit, year and a half ago when bitcoin reached its all-time high of $19,500 and then fell to $3,000 a year later. Inexperienced investor could suffer a massive loss if he doesn't fully understand complexity and trend in particular sectors preventing him from making great investment decisions.

Another mistake that investors make is expecting to much and too soon. It is crucial to have appropriate mindset when you are getting into investing. Just be realistic! It is most probable that you will not make small fortune overnight even though that sometimes happen. Be aware how the stocks in which you invested money performed in the previous period and what was the average return which is usually indicative of future  stock performance. Patience is a virtue, especially in investing. As in life and in business, good things take time. Slow and steady progress almost always delivers results.

You may think that jumping in and out of position trying to beat the market is a good strategy. But every time you execute a trade broker charge you a fee and if they accumulate this can negatively affect you return on investment. Be careful also to avoid high cost funds and be aware of the expense ratio, percentage that fund takes from your money each year. This mistake can be costly.

Not only fees will eat away your returns but also the idea that you can time the market. The truth is that no one surely knows how market is going to behave. On the same business day you can read or hear completely opposite opinions on where the market is heading. It is better to just invest and not try to catch the perfect timing.

Don't put all your eggs in one basket. it is a big mistake to invest in only one fund, stock or a type of security. By allocating to various sectors and types of securities like stock, bonds and cash equivalents you spread the risk. This doesn't mean that you are guaranteed a profit but it will protect you from losing all or most of your money.

Labels:
Location: West Palm Beach, FL, USA

Comments

Post a Comment

Popular posts from this blog

OTC stocks more difficult to trade and deposit

  Mina Mar Group helps micro-cap companies structure their growth. Micro-capitalized companies are those with less than $50,000,000 in equity, sometimes under $1,000,000. Restructuring involves raising money (both debt and stock), and planning how they will eventually harvest that wealth. If you’re a founder or investor, the secret to harvesting your equity is to possess assets with a developed market for their sale; up until recently, that market was the public market. Now, Over-The-Counter Securities (“OTC Securities”) don’t serve that purpose since, unless you’re a tech unicorn doing an IPO, there are essentially no ways to sell the shares you’ve invested in. OTC securities – how they were deposited five years ago. Brokerages all around the country have tightened compliance over the past five years to the point where no one may deposit share certificates into their brokerage accounts, even if they can prove that they paid for them. Consider the following demand from a secondary ...
Post a Comment
Read more

Going through Acquisition with Mina Mar Group

An acquisition is the purchase of one business or company by another company. It happens when acquiring company buys most or all target company's shares in order to take control and or other assets of the company. They have to buy more than 50% of ownership. In acquisition usually bigger company buys smaller company and absorb it or run it as subsidiary. Roll-ups or consolidation happen when two or more companies combine in a new business entity. Acquisitions are divided into "private" and "public" depending on whether acquired or target company is or is not listed on the public market. Additional dimension or categorization consists of whether an acquisition is friendly or hostile (hostile takeover). More mergers and acquisitions happens with small to medium size companies. One type of acquisition is reverse merger or reverse takeover enables private company to be publicly listed in a relatively short time frame. Reverse merger occurs when a privately ...
10 comments
Read more

Our perspective on reverse merger

When we are talking about market perspective usually the financial community is mostly focused on private companies that want to go public and are prepared to pay for the privilege of going through an IPO or reverse merger. That is why most financial consultants are looking for the public shell company just to close the deal. Often private companies that use reverse merger to go public are ill-informed on ability to raise funds, unprepared for the intensive effort and extensive costs to create liquidity. This can even lead company to become a shell itself due to lack of action in implementation of needed solutions. This way there is no long term benefit on both sides. Mina Mar Group sees things quite differently. Instead of making quick profit shared between shell owner and us. We deal with private companies that already offer profits  and that truly deserve to be publicly traded and can attract investors at the retail and institutional level and build...
11 comments
Read more