10 Common Newbie Investing Mistakes to Avoid

I haven't been feeling very inspired to blog lately as markets have been exciting and I wonder whether the bear is coming. Both ACCICB and I still feel like a newbie at times in front of Mr Market therefore I decided to write the following post.

1. Forget about waiting for the ideal price to buy or sell which may either never happen or you may have to wait for a very long time for it to happen. It is better to have a range of prices say +/- ?% and just execute your order. I left the % as a ? as it is up to each individual's level of comfort.

2. Try to resist being greedy and take profit when it hits your target price. It is far better to have $$$ in your pocket rather than trying to attain the near possible by selling at the all time high. Similarly, why try to save a couple of bucks by obsessing at buying at the all time low when you could end up missing the opportunity of upside gains. Sometimes instead of thinking in %, think of it in actual $, this changes your whole perspective. 

3. While we should all have savings, don't wait till you have tons of money before investing as you could be missing out on buying opportunities. As I mentioned before, a couple of thousands can get you started and you can then slowly add on to your portfolio every month after pay day

4. Tread carefully when you purchase foreign stocks as there is one more element called exchange rates which can negate all your gains in the stock such that you end up with zero or negative gains. If you are a newbie, stick to the local stocks until you gain enough experience to venture overseas

5. Don't place all your trust and therefore your money into any analyst's report or any person who claims to be able to predict the next winning stock as nobody should be playing God while we are on Planet Earth. The same supposedly self proclaimed expert can also flip flop on the same stock within months and that's when shit hits the fan 

6. Mentally prepare yourself that you could lose $$$ as when the time comes, you may have to cut your losses rather than see the counter's price continue to drop day after day as some counters may never come back to your initial purchase price

7. Remember that investing is not a quick get rich scheme so it could take time and much needed effort on your part before you earn a decent allowance from it unless you are one of those rare geniuses who make this their life long profession. Thus you need to put aside time every week to work on getting better at this!

8. Once every so often, take a look at your watch list to see whether you should remove any counters rather than have an ever growing watch list which would be very distracting to your eye as you keep track of the prices and its related news. You could end up losing focus and miss some golden opportunities

9. Whatever method you employ when investing whether it's fundamental analysis, technical analysis or value investing or whatever other methods not mentioned here, it may not shelter you from what I called unprecedented events such as SNB's shock announcement. Don't beat yourself up when that happens, just pick yourself up and decide what you should do next

10. Change tactics if whatever you are doing has not been working out for you for a while. This is not work or school and nobody should dictate what would work for you or not. There are no rules to follow and you should discover your own individual investing style and methodology

Related articles: Million Dollar Traders
                           10 Things I wish I knew before I started Investing

Comments

  1. Hello Joyce!

    Noted all of the above points shares by you..!

    Happy v day!

    Jfree

    ReplyDelete
    Replies
    1. Hi Jfree! Thanks for coming by despite it being V day! Happy V day to you too! :D

      Delete

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