Investing Mistakes to Avoid

Mistakes to Avoid During Investing

It is not uncommon to make a few investing mistakes, however there are big mistakes that you absolutely must avoid if you are to be a successful investor. One common mistake people make is to not invest at all, or say they are waiting until a later time to begin. Make your money work for you, even if all you can spare is $20 a week to invest.

Not investing at all or putting it off until a later date are not the only big mistakes you can make, waiting until you think you are in a good financial position is often another big mistake. However, first you should work on getting your current financial situation in order, before you begin investing. Begin to work on raising your credit score, by paying off any high interest loans or credit cards, and then save enough money to cover living expenses for at least three months. Once this is done, you are ready to start letting your money work for you.

Do not invest with the motivation to get rich quick. That is the riskiest type of investing that there is, and you will more than likely lose. If it was easy, everyone would be doing it! Instead, invest for the long term, and have the patience to weather the storms and allow your money to grow. If however, you need some extra money in a relatively short amount of time, then you can make a ’short term’ investment, such as certificates of deposit.

Don’t put all of your eggs into one basket. Spread your money around in several types of investments in order to get the best results. Once you begin investing, do not move your money around too much. Be patient and let it grow. Choose your investments carefully, as you invest your money you will need to allow it to grow so don’t panic if the stock drops a little. However, it is important to make sure you invest in stable stock, so if it ever drops, it will go back up again.

A lot of people make the mistake in thinking that investing in collectables will give a high return. As mentioned before, if this were true then everybody would be doing it. Don’t think that your hobby collection will eventually be the monetary means used in paying for your retirement. Count on investments made with cold hard cash instead.

A good word to keep in mind, is something Warren Buffett once said about investing, "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."