To be a stock market investor, it is vital for a person to be level headed and logical. Many people come into the market with brilliant new ideas and shine like stars. An investor needs to be able to think and make decisions on the go.
Are you a stock market investor? You can boost your chances of investment success by becoming aware of the typical errors. Of the mistakes made by investors, many of them are repeat offenses.
Here are 6 mistakes that investors make on the stock market:
1. No plans
An investor should have a proper plan. Then only he or she will know what they want. Investors should know what they are trying to achieve, for this a plan is necessary. Just like some investors invest for retirement, some people for the education of the children, marriage, buying a home, etc. Some investors invest for short term goals such as a vacation, buying bike, travel, etc. Having an investment plan helps the investor to decide the type of securities to invest, the period of investment, how much to invest to get the expected return, etc.
2. No research
It is important to study the company before you invest. Don't proceed with somebody's advice. Check the history of the enterprise shares and the performance in the market before going forward with any investment. 6 Best Investing Tips To Do In Your 30s
3. Market trend
Don't give too much importance to market trend news coming in financial magazines. You can refer the Financial reports before making any investment. But sometimes going with market trends make investors fall into the trap of speculation and investors may lose the money. Do a self-study before investing with the market trend. 4 Best Undervalued Banking Stocks To Buy in India
4. Missing Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, mutual, exchange-traded and closed funds, etc. You need a portfolio to invest in stock market. Diversify the portfolio will help in cutting losses and maximize return. Creating a good Portfolio is important to avoid risk. How To Double Your Income? Here Are 5 Quick Ways
5. Depend too much on investment manager
You should have confidence in the ability of the investment manager. It is perfect for the performance. But don't dependent on the manager for every investment that is made. This may lead to an investment mistake.
6. High performing securities
Don't look for high performing securities only. Just because it is performing well in the past year doesn't mean that it will continue the success in the same way in the future as well. Understand how the company you are buying the shares has been performing based on its profit and loss statement, balance sheet and cash flow statement before investing. What Are The Different Ways To Invest In Mutual Funds?