Common investment mistakes that you can avoid

Nobody is perfect. All of us have our wins and losses. However, when it comes to investing, some of the mistakes you might make are actually pretty common. Whether you are dipping your shoe in the investment game for the first time or you’ve been playing the market for years, there’s always a possibility that your strategy may backfire. 

Here are some of the most common pitfalls investors should try to avoid:

1. Investing without a plan

Don’t make the mistake of spending more time planning your vacation than planning your financial future. Investing is like anything else; the more planning you do before you get started the better the chance of success. Before you start sinking cash into stocks, bonds or other investments you should take some time to map out where you want to go.

2. Expecting too much from your investment

Like it or not, the simple act of investing alone won’t solve all your financial problems. The best thing for any investor to do is to keep their expectations in reality. Look at what the stock market actually does, not just in one year, but over a lot of years, and use those numbers for your expectations.

3. Not doing due diligence

Just because some article suggested investing or some television show said that a particular investment is amazing doesn’t mean it is something you should be putting your money into. Be wary. Put in the time to research an investment by doing things like reading the prospectus.

4. Mirroring someone else’s investment

Investors tend to get carried away by the buzz in the market or the media or among the friend circle and tend to make wrong choices while investing. What works for one investor doesn’t necessarily pay off for the other and you need to be wary of following the crowd. Do thorough research and exercise personal judgement before investing.

5. Being driven by impatience

We may have touched on different emotions you can have when you invest, but one of the most expensive ones is impatience. Remember that stocks are shares in a particular business -  business operates much slower than most of us would typically like to see, or even than most of us would expect. When you first get involved with shares of the company, don’t let impatience get the best of you… or your wallet!

In conclusion, it’s a lot easier to enjoy the investment process when you learn how to avoid the most common and expensive investment mistakes. Steering clear of just one of these five common investment mistakes can literally make the difference between wealth and poverty.

Cedrus Wealth Partners helps you draw out an investment plan according to your requirements. We won’t spend your time selling you an investment option that isn’t the best for you. We will simply ask you a lot of questions, figure out where you are going and help you tweak things so you can stay on the path you want to be on. Because, that’s what a good financial advisor does.