Top 7 Mistakes Beginner Investors Should Avoid

Margo

Margo

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Jun 15, 2018
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Get-rich-quick Idea, a lot of emotions, hasty actions as well as a number of other mistakes are admitted by almost all unsophisticated investors. Lack of knowledge about investment models, absence of a clear plan are often a common mistakes made by beginner investors. However, this is not an exhaustive list the main causes of investment losses and the lack of desire to move forward. In this article, we will examine the most common mistakes and misconceptions of beginner investors.

Get-rich-quick Idea

A man whose eyes light up when being offered 100% yield is likely to be a beginner. After all, experienced people know that investing in a project with a yield higher than that offered by banks is associated with the risk. The annual yield of 8% can be considered relatively safe. Anything higher will require either much work or a lot of nerves. Do not allow greed to nip your career of an online investor in the bud.

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Lack of Funds

Money needs counting. Can you imagine how much money you spend on products, on utilities, entertainment every month? If not, begin to make at least an elementary account of the major expenses. This will allow you to more efficiently keep your budget and correctly calculate the amount that can be invested in projects.

A Lot of Emotions

Do feelings overwhelm you? You cannot resist investing your money in an awesome project? At first, relax, count to ten, breathe deeply. Do not take decisions based on emotions, in our case the main is to weigh everything and calculate soberly.

All Eggs in one Basket

Are all your funds kept in a single project? It is a very silly and very common mistake that has ruined more than one life. Diversify investments, do not to play with fire.
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Incorrect Response to Small Losses

Your balance dropped by 2-3%, and you're already starting to tear your hair, sobbing and screaming, "Why has it happened to me?" Go back to the point about being too emotional. capital reduction is quite normal at some stage of work. This is not a reason to go panic and withdraw money.

Investing in Unknown Activity

The simplest example is the beginning of work at the stock market or Forex PAMM accounts without any training. Neither do you have a mentor, nor are you familiar with the terminology, you only heard somewhere that others make money on it. In this situation your capital will melt like snow in a warm April sun. Master gradually, learn the theory and begin with a demo account. Find an experienced mentor who will be your reliable advisor.

Hasty Actions

Do not get fooled by the pressure from managers, salespeople, and other adherents of this or that company. They need you to invest, all the rest is of low interest to them. Always take some time "to think," analyze and do not do anything in a hurry. But remember that everywhere should be a balance: excessive tardiness is unacceptable as well.

Investing Emergency/Daily Needs Funds

The market in the world and in Russia in particular, does not like such players, and is certainly not to be on your side and you will be left without any bread. Invest only the amount that does not reduce the level of your well-being.

Taking Loans and Making Debts

Keep in mind that the loss of your own money is one thing. But credit and borrowed funds, involving the payment of interest, are quite another. Do not take such a risk, being a beginner.

Find friends among private investors, do not hesitate to communicate, ask for advice and share your opinions. In such a way you will become more experienced, better know the market, feel trends and understand the principles of forming the stock market portfolio. Such communication will allow you to learn from somebody else’s experience
 

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