The Worst Mistakes in the world of investment

Common mistakes made by beginners in the investment world, investing in the most common ways to increase income or savings in the long term or short, and to be able to reach the level of investment appropriate to your goals and your financial ability, you must acquire the expertise that gives you the technical skill to manage these investments, Getting into investment mistakes will cost you a lot. Naturally, there are some mistakes in the world of investment, as in everyday life. Despite our previous experience and information, a certain person or program can not always do it perfectly. This is because investment often involves some ambiguous aspects, and may be affected by emotional 
 

Common Mistakes in the Investment World

1. Lack of planning idea

One of the common mistakes investors make is to start forming an investment portfolio without prior planning. Such as starting a certain investment nominated by one of your friends, without studying the subject and then planning it. Because you are the one who will bear the result of your investment decision, even if this nomination came by mistake.
Investment planning gives you the opportunity to identify your desired objectives in addition to the financial possibilities and then you can identify the investment options that are appropriate for you and how to invest in them and the necessary period and other things that must be prepared in advance rather than taking a random decision.

2. Non-diversification in the investment portfolio

Some believe it is better to focus on one investment so that your ideas do not distract or make more effort to follow up on many investment tools. But this is a very risky method, especially with volatile market performance, where portfolio diversification is the best way to reduce the risk to your portfolio. Also, do not forget that portfolio diversification is not easy and requires concentration and comparison of options in return and risk

3. Look at profits without risk

Some people look at the earnings figures generated in a particular investment without considering the risk associated with that investment, which may be relatively high with the expected rate of profit.
Investors differ in terms of their investment methods. Some of them wish to face high risks by nature and invest large amounts in investments with high expected returns and vice versa if they are willing to take risks.

4. Neglect of investment period

It is important to know the right investment period for you to identify the elements of your investment portfolio. For example, if you are looking for retirement savings investments, this refers to long-term investments. You should not invest in stocks that need to be tracked daily to determine when you can buy or sell for profit. It is better to invest in long-term assets such as real estate or investment funds with long investment periods, and vice versa if the desired investment period is short.

5. Do not follow the news

Follow up the news of the most important skills needed by any investor no matter how different his experience, by following the economic news you can know the impact of these news or new financial decisions on the market in general and on your investments in particular, which helps you to decide to increase investment or reduce or change your strategy.

6. Failure to follow up performance

The importance of monitoring the performance of your portfolio in identifying the strengths and weaknesses of the portfolio, which gives you the ability to avoid further losses and change your strategy to achieve more profits.

7. Making emotional decisions:

Investing in science and art. In general, it must contain both, to avoid emotional decisions that are biased and often lead to catastrophic consequences. The right decisions regarding investment must be based on research and careful study and subject to arbitration of logic.

8. Adhering to the losing investment until the value of its expenses and revenues is equal:

It is better to resolve the losses and move forward, and avoid insisting on the wrong decisions. But some investors find it difficult to recognize the mistake and eliminate it from the first, such as buying one investment, and then lose value later. And then decides to keep it until the market rebounds again, to equal the value of its expenses and revenues and then sell it. But he would not do that if the investment went up again, hoping for more profits if he kept it and did not sell it, which would reinforce his belief that the purchase decision from the start was correct.

9. Lack of patience:

Any investment requires a lot of patience, along with no hasty decisions on things that are not quite clear. The results of the investment do not appear at the beginning; there are many cases that may see a decline for several years, before recovering again and earn high profits.

10 Exaggerating interest in previous years' revenues:

When you choose an investment, your money is not dependent on the earnings of previous years alone. For example, if you plan to buy a mutual fund, it is important to assess the performance of your management during periods of recession in the market. If you lose less, it is a sign of having a strong risk management system.

11. Compliance with Recommendations:

A friend advises you on a particular investment, not necessarily that it is necessarily good; there are many things to consider when evaluating investment opportunities, such as those of previous years. But keep in mind that they do not always affect the returns of the years to come. Funds that reach their peak of success in a year may not stay the same for the next year.

12. Fear of investing again after falling into a big loss:

When investors suffer a terrible loss of fear, they sell their losing investments, and wait until they feel safe to return to the market. But stocks usually have risen significantly during this time. While it is preferable to invest at a time of low prices, they tend to be cautious after a big loss, and most of them hesitate to return to the market after a major setback, which is also a mistake. To avoid this, it is best for you to set clear rules for determining the right time to sell or buy. You will then see that your investment opportunities are starting to improve.

 

In the end we have presented you with 12 common mistakes made by beginners in the world of investment, we hope you have benefited from this article.