Introduction
It is such a big waste time for me to track so many swings in the stock market recently. I like to learn basics and see if I can improve my performance on this recession. Top 20 common investment mistakes is a good research topic, I like to memorize those mistakes first.
Top 20 common investment mistakes
Here is the article.
- Expecting too much or using someone else’s expectations
- Not having clear investment goals
- Failing to diversify enough
- Focusing on the wrong kind of performance
- Buying high and selling low
- Trading too much and too often
- Paying too much in fees and commissions
- Focusing too much on taxes
- Not reviewing investments regularly
- Taking too much, too little, or the wrong risk
- Not knowing the true performance of your investments
- Reacting to the media
- Chasing yield
- Trying to be a market timing genius
- Not doing due diligence
- Working with the wrong adviser
- Letting emotions get in the way
- Forgetting about inflation
- Neglecting to start or continue
- Not controlling what you can
My most favorite one:
4. Focusing on the wrong kind of performance
There are two timeframes that are important to keep in mind: the short term and everything else. If you are a long-term investor, speculating on performance in the short term can be a recipe for disaster because it can make you second guess your strategy and motivate short-term portfolio modifications. But looking past nearterm chatter to the factors that drive long-term performance is a worthy undertaking. If you find yourself looking short term, refocus.
5. Buying high and selling low
The fundamental principle of investing is to buy low and sell high, so why do so many investors do the opposite? Instead of rational decision making, many investment decisions are motivated by fear or greed. In many cases, investors buy high in an attempt to maximize short-term returns instead of trying to achieve long-term investment goals. A focus on near-term returns leads to investing in the latest investment craze or fad or investing in the assets or investment strategies that were effective in the near past. Either way, once an investment has become popular and gained the public’s attention, it becomes more difficult to have an edge in determining its value.
4. Focusing on the wrong kind of performance
There are two timeframes that are important to keep in mind: the short term and everything else. If you are a long-term investor, speculating on performance in the short term can be a recipe for disaster because it can make you second guess your strategy and motivate short-term portfolio modifications. But looking past nearterm chatter to the factors that drive long-term performance is a worthy undertaking. If you find yourself looking short term, refocus.
5. Buying high and selling low
The fundamental principle of investing is to buy low and sell high, so why do so many investors do the opposite? Instead of rational decision making, many investment decisions are motivated by fear or greed. In many cases, investors buy high in an attempt to maximize short-term returns instead of trying to achieve long-term investment goals. A focus on near-term returns leads to investing in the latest investment craze or fad or investing in the assets or investment strategies that were effective in the near past. Either way, once an investment has become popular and gained the public’s attention, it becomes more difficult to have an edge in determining its value.
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