First Time Investor? Mistakes You Need to Avoid

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19 March 2018. There is no denying that investing can be very appealing. Making money work for you is something that most people want. However, it is never that simple. A lot of people have lost a considerable amount of cash because they have started to invest without the necessary knowledge or experience. Gambling or hitting and hoping are not investing. With that being said, read on to discover some of the most common investment mistakes that you need to avoid.

Gambling. Let’s begin by expanding on the point mentioned in the introduction: gambling. A lot of people confuse gambling and speculation with an investment. If you blindly pick a stock or you act on a tip that someone has given you, this is not investing, and this is where a lot of people go wrong. You need to do your research so that you can make an informed decision, and you need to believe in this decision so that you are able to stick with it for a while.

Not enough research. This leads onto the next point perfectly: not doing enough research. This is a mistake that a lot of new investors make because they are so tempted to dive right in and make some quick cash. If you do this, the reality will be very different, and you are bound to learn the hard way. There are so many textbooks and reports online – such as this one that provides you with a VHT price quote – which will give you all of the information you need, from historic performance to vital stats. There is no such thing as too much research when investing for the first time.

Not considering your attitude to risk. Everyone has different tolerances to risk, and you need to consider yours before making a financial commitment and investing in something. Someone else may have no problem risking a lot of cash, yet if you are more cautious, you need to choose investments that reflect this.

Putting all of your eggs in one basket. If you put all of your eggs in one basket, you are going to very susceptible to any changes in the market. If price movements go against you, you could be staring at a huge loss. However, if you diversify your portfolio, one underperforming investment will not sink the ship.

Being fooled by low prices. A good investment is not one that is available at a low price. Of course, this is not a bad thing, but price alone does not indicate the value of an investment. It is all about finding value, i.e. something that is going to make you a good return.

So there you have it: an insight into some of the most common investment mistakes that are made by beginners. If you can avoid falling victim to the blunders that have been discussed above, you can give yourself a great chance of a smooth and profitable investment journey.

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