7 Biggest Mistakes Investors Make HTML version
Five: Believing that “sell” is a
You don’t need to be told that Warren Buffett is one of the most amazingly
successful investors in history. He’s developed a phenomenal system that’s
resulted in making billions of dollars in the stock market.
But unfortunately, small investors have tried to emulate the methodologies
Buffett used at Berkshire Hathaway. It sounds easy enough: You learn
about a company, spot so-called “undervalued” stocks, buy them, and hold
We said “unfortunately” above, because too often, that method just doesn’t
work out. And it fails for the same reasons that growth systems don’t work
for most people: It’s too complicated and time-consuming. That’s obvious.
It also requires some guesswork on the part of individuals. How can you
be certain that a company is currently undervalued, and it will eventually
begin to rise higher again? Do you have the time, resources and know-how
to do all the research and analysis that Warren Buffett and Charlie Munger
do at Berkshire Hathaway? I’m gonna say that’s a no.
And that’s just on the buy side. How about on the sell side? This is where
the Buffett emulation has hurt a lot of people. Don’t get me wrong – I’m
not disrespecting or doubting Mr. Buffett! He’s got a great system that
works well in his situation. I’m just saying it’s not so easy to re-create at
For most at-home investors, it’s not the waiting that’s the hardest part – it’s
the selling (sorry, Tom Petty). The old adage about “buy and hold” morphs
into “buy and forget about.” So investors often sit with big losses,
continuing to believe that the stock is bound to go up…someday.
Seven Biggest Mistakes Investors Make