Basic mistakes to avoid when investing

Augusta

VIP Contributor
You would always want to invest, because it is the right thing to do. But you need to avoid making mistakes that would cost your hard-earned money going down the drain. The following mistakes should be avoided when you are investing

  • Don’t shares from a company or business you do not understand
  • Don’t expect so much from your investment especially when it has to do with stocks i.e penny stocks ( low priced stocks)
  • Don’t use money you cannot afford to risk; investment is about risk and more risk
  • Don’t be driven by impatience, some investment really do take time
Add your own don’ts?
 

Segat

Active member
Investment is putting your money in a business or something to be expecting profit in return. Avoid blind investment, I mean don't invest in what you didn't know much about. Do your research very about anything you are putting your money on, this is to avoid stories that touches the heart. Avoid putting all your resources in a particular investment.
 

Samuel72

Verified member
according to my own point of view as a well experienced business man the first thing you should note about investing is that investment is for profit making and also you should note that before investing in any business you need to know the interest rate of the business and also you need to be aware of the unnecessary risks that involved in the business. All investments have their own risk and also their own owner is in all investment which of course sometimes in future
 

Ozigba Richard Lamai

Active member
some of the basic risk to avoid while investing is knowing the kind of business you want to invest in before university in it and also making research and having some lectures details about the business before going into or venturing into such business with this you will be able to succeed well in the business and overcome Rick. Rick's is one of the basic thing that you must improve business.
 

Godslamp

Active member
Lack of patience is a common mistake that occurs during investment. A slow and steady approach to portfolio growth will yield greater returns in the long run. Expecting a portfolio to do something other than what it is designed to do is a recipe for disaster. This means you need to keep your expectations realistic with regard to the timeline for portfolio growth and returns.
 

Godslamp

Active member
Emotions can also play a deceptive game on traders during investment. Perhaps the No.1 killer of investment return is emotion. The axiom that fear and greed rule the market is true. Investors should not let fear or greed control their decisions. Instead, they should focus on the bigger picture. Stock market returns may deviate wildly over a shorter time frame, but, over the long term, historical returns for large-cap stocks can average 10%.
 

Haypril

Active member
Since the primary aim of every investors is to make profit from the invested capital, then there is need to put some factors into consideration when investing in any form of business be it online or offline businesses. When investing try as much as possible to avoid what I call mouth investments. It's just a form of investment you venture into because people say it paying or because friends and family recommended it and you refuse to carry out research.
 

Simplyniyi

New member
When putting your money on a business or investing on a business, you are taking a risk which could be positive or negative, therefore, there is need to consider, what to invest, how to invest, when to invest and why you want to invest. When you want to invest, don't put your mind or focus mainly on what you want to gain. When you put too much expectations on what you invest, you may be discouraged if expectations are not met. Don't put all eggs in one basket, if you do, you stand a chance of losing all you have if things go wrong.
 

Godslamp

Active member
Over the short term, anything can happen. You cannot control the outcome of your trades and you can certainly not predict the outcome of your next two, three or even ten trades. But over the long term, that does not even matter. If you have a trading strategy that has a positive expectancy and follow it religiously, the only possible outcome is making money.
 

Godslamp

Active member
The distance of your stop loss has no relation to the potential risk of your trade. Risk is measured in a potential loss of your trading account. You have to set the stop distance in relation to the take profit distance and the trade size to get an idea of potential risk.
A sure sign that traders don’t know what they are talking about is when they start comparing profits in terms of pips. Pip measurements are totally random and have no value of expressing performance. Pips are relative!
 

IamDozzy

Active member
The most common mistakes a lot of investors make in the case of a written agreement when investing is not having a witness during the signing of an agreement. Some investors usually underrate the need of a lawyer or witness during investments. Also, thorough investigation needs to be carried out about the Investment before investing. This is to avoid investing in something that is unreal.
 

Godslamp

Active member
Getting even is just another way to ensure you lose any profit you might have accumulated. It means that you are waiting to sell a loser until it gets back to its original cost basis. Behavioral finance calls this a "cognitive error." By failing to realize a loss, investors are actually losing in two ways. First, they avoid selling a loser, which may continue to slide until it's worthless. Second, there's the opportunity cost of the better use of those investment dollars.
 

Alexandoy

VIP Contributor
When we bought our first corporate stocks, we did not make a study and just agreed because the stocks were part of the purchase of a Pager. Unfortunately after a year when the cellphone came out in the market the company got bankrupt. That was a bitter pill to swallow. It is painful to lose $120 during that time when we were struggling with our finances.
 
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