7 Biggest Mistakes Investors Make
For example, if you decide that you’ll sell if a stock falls 6% below the
price where you bought it, just sell if the stock falls to that point. If it
rebounds, you can always buy it again. But especially in weaker markets, if a
stock drops too far below its buy point, it frequently won’t bounce back
any time soon.
So make a habit of selling to cut losses. That’s another wise move that
protected the most successful individual investors in the 2008 and 2009
What good is holding your shares until you lose 50% or 60% of what you
had before? What good is holding your shares until you’re dead?
Sure, there are the old stories of Great Aunt
Betty who owned shares of Early American
Railroad and Telegraph and Motorcar (we made
that up, by the way), which she bought in 1933
and still held when she died in 2005. Yeah, yeah,
they’d split 17 times and this and that, and were
now worth $1 million when she’d paid $26.50,
and her heirs are whooping it up. Whatever. Yes,
that happens once in a blue moon. So does
winning the lottery.
Don’t count on long-term investing, or buy and hold as your little ticket to
heaven. Learn to sell at the right time to keep your gains – or cut your
losses very small – and you’ll make money.
Seven Biggest Mistakes Investors Make