Investment is becoming ever so popular with hundreds of investment “gurus” emerging from many social media platforms like YouTube, Instagram, and TikTok. 

The thought of making your money work for you is understandably appealing. The sooner you start, the higher the growth of your returns. 

Nevertheless, investment is not as easy as buying low and selling high to get profits. It is a rather intricate process that must not be taken for granted in order to secure good returns with minimal losses.

But, how do you differentiate between what is right and what is not? Here are the investing mistakes you should avoid, especially if you are new to the investing arena.  

Rushing Into Investment

One of the golden rules of investing is to always do your research. You are encouraged to thoroughly understand all about investment and the risks that entail. This way you know the game you are in, and you are able to strategically plan your growth, financially.  

Most investors make the mistake of gravitating towards the most recent industry that appears promising while having only a very basic understanding of the business. 

If you truly comprehend the business model, you will have a lead over other investors. You can tell whether the market is about to rise or plummet. This gives you the capability to decide how much you could invest, what is the risk, and how much return you could possibly get. 

With better knowledge, you will be at a better place of taking strategic decisions to ensure your investment grows. However, always remember to consider the volatility of the market you are investing in. 

Going With The Trend

The use of social media, as well as media coverage in general, has the ability to influence people. Investment is another area that has succumbed to this trend. It is only natural to choose the strategy that has proven to be the most effective for the majority of people. 

Nevertheless, mimicking the success path of another does not necessarily guarantee you the same victory. 

Promising returns from investment can be the core reason for your ideology in investing in the stock market or cryptocurrencies. Some markets, for instance, cryptocurrencies tend to be very volatile but if done correctly, it promises a huge return in a shorter period which is very appealing to new investors especially. 

Engulfed In Emotions

The financial journey is long and unpredictable. Therefore, emotions can sometimes be your weakness when investing.

The most common mistake done by investors is being impatient. Stock prices tend to fluctuate based on business management strategies and can be hard to predict. Not having the patience to see what the business delivers often leads to many investors selling their shares too soon which leads to loss.

Besides that, greed and fear can be the downfall of any investment. Fear of investing halts you from opportunities that could be great for your investment journey. 

Thus, tracking back to the first mistake shared in this article, thorough research could help you make the decision in a more statistically-oriented approach compared to relying on emotions. 

Greed, on the other hand, can prevent you from thinking logically. Greed is natural when it comes to investing because the goal is to make more money. Investing entails taking risks. Although taking more risks may appear to be a daring deed, make sure you are taking calculated risks and not being affected by your emotions.

Failing To Diversify 

As mentioned earlier, investment is a risk-associated business. So, relying on one single market to guarantee your growth is unrealistic. This is usually a common mistake made by beginner investors. 

As the seasoned investors would say, “Don’t put all your eggs into one basket”. Diversification is a risk-reduction strategy. This way, if any of your investment fails to perform as expected, you will not lose all your money. 

Among the best ways to diversify your portfolio is to look into other avenues of investment. Instead of just stocks, you could also consider REIT’s, Gold, Bonds, and cryptocurrencies. 

If you prefer staying in the same asset class, then buy shares from different companies comprising different industries. 

For example, if you have invested in both the hotel and health care industries, the stock market of the hotel industry plummeted during the pandemic but the healthcare stocks are performing well. So, not all will be red for you.  

Lately, cryptocurrency is also a “hot” investment option. Although it is more volatile than stock markets, with the right strategy you can make use of its highs and lows to incur a good return on investment. With multiple types of cryptocurrencies to buy and invest in, it is easier to diversify your investment portfolio. 

Invest Smartly!

Investment, if done patiently and correctly, could make your financial journey profitable. Invest for the long run and never time the market. Also, avoid the investing mistakes above!