3 Common Mistakes Investors in the Stock Market make Each Day ...
Mistakes when you are investing in the stock market are usually costly. And the vast majority of us have made our fair share? which is why so many studies demonstrate that over 75% of investors, even the so-called ?professional? advisors, lose money investing in the stock market. Given a few moments, we could write quite a comprehensive list of mistakes we?ve made? and among this long list, we?d find three common ones almost every investor makes each day. Predicting vs. Preparing
When you make an investment, whether it be in a mutual fund, GIC, stock or other financial instrument, you do so with an expectation in mind? namely, to make money. However, depending on the financial instrument, you?re ability to ?guarantee? your outcome can be quite illusive.
One of the most frustrating experiences for investors is when their investment does not do what they predicted it would. Usually, losses occur and investors are left wondering what went wrong. Some double-down? making another prediction that it will turn around eventually. Others pull the plug, emptying their account prior to the upsurge.
Prediction leads to emotional turmoil? and more often than not, losses. There is a subtle, yet significant, shift in the mind of profitable investors. Instead of trying to predict the movement of the stock market or their individual security, they prepare for the changes. It?s like having both an offence with which to attack and score when momentum is behind you and having a defence with which to preserve your capital and minimize your risk when the headwinds simply get to strong to fight. Guessing is attune to gambling not investing, so be sure to have a bent toward preparation over prediction.
Assuming Unnecessary Risk
Risk is a reality of investing? and can lead to some significant rewards. But you don?t have to risk big to experience big returns. Many investors, in hopes of winning big quickly, risk big. They use their home as leverage, borrowing and increasing their debts to invest with the hope they?ve predicted things correctly. But when they are wrong, the debt levels can become overwhelming, only increasing the anxiety of investing.
It?s a natural tendency for investors to try to win big? and with the number of courses in online short-term stock trading (day trading) or forex or options, the opportunities are there to try something new. Unfortunately, many inexperienced investors assume the role of a desperate gambler, betting their last few dollars on a handful of long shots. Why take on so much unnecessary risk when there are so many well established stocks with significant growth and revenue? some of which are offering decent dividends.
Refusing to Change
The third common mistakes investors in the stock market make each day is to refuse to make changes. Whether it be frustration and refusing to make changes in your portfolio or an unwillingness to consider another?s strategy, investors can be so entrenched in their ways they continue to simply lose money out of stubborn refusal to change. Take account of your portfolio? and if you continue to experience losses or are simply spinning your wheels, take some time to consider a few other investment strategy services that can help you make money in the markets each day.
No one likes to be proven wrong? but we have to change our mind sometimes. It?s natural to feel angry when you get run over by a stock? but it is an exercise in pain that can be like growing pains if you learn from your mistakes. Don?t dig in your heals? or you may just dig a hole you can?t really get out of in your lifetime. When the game is done, you can?t win anymore? yet many people won?t admit the game is over, despite people running from the stands and the lights being turned out on a stock.
What common mistakes have you seen investors make time and time again? Are you willing to share one of your own so others can learn from your mishap? Hopefully, we can all?avoid these three common mistakes investors make in the stock market each day.
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