10 Mistakes Every Investor Makes and How to Avoid Them HTML version
10 Mistakes Every Investor Makes & How to Avoid Them
companies provide great shareholder value, so when an investor
buys stock they feel they are buying a company. They view their
purchase as owning a piece of the business.
Investors are buying something they believe has strong leadership, a
great business plan and a competitive edge that will continue to
increase corporate earnings for years to come. These companies, in
turn, will provide shareholders with a profit by returning dividends and
an increase in company value, both which will contribute to
increasing an investor’s net worth.
But it’s easy even for an investor to get
caught up in the hype of a hot stock or
quick profit now and again and start to
act like a stock trader. Investors have to
remind themselves what their ultimate
goals are and refer back to their
As an investor, the most important thing is to protect oneself from
losses. When they start to act like a trader to make a quick buck,
investors put themselves at too high a risk of losing money. Just
think, if you lose 50% in a trade, it will require a 100% profit in
another just to break even. These percentages should be too much
risk for an investor, who is generally careful to protect his/her
downside. One temptation to ignore their investing rules and act like
a trader can greatly impact their overall investment returns.
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