Deadly Mistakes Newbie Investors Make and How You Can Avoid Them
To make it in the business world, you have to take insane risks. And although veterans already know how to wade through these murky waters, newbies may find it a little bit more difficult. The greatest challenge is what we all face when we’re introduced to something new – the disconnect between what we know and what we don’t.
Legit Advice or Not?
And when you’re green about anything, you term any piece of advice you get legit, right? However, people have all sorts of opinions about anything and everything, and they may not entirely be right.
Say you intend to purchase shares from company X, this being the very first time you’re ever doing it. Some of the advice you’re likely to receive would be something close to how you have to do thorough research on the company in question so as to pinpoint the exact time that would be best for you to buy in.
If you are going in with your startup investment fund, you may be told to think long and hard before rushing into investment choices.
However, financial experts agree that this is hardly the way to go, with Rob Cavallaro of the RobustWealth financial institution not being left behind. He actually expounds on why novice investors lead themselves astray, borrowing from the medical field.
Ever heard of the Hippocratic Oath? It is a code of medical ethics that doctors have to adhere to once they are licensed to practice. The Oath’s first principle is “Do no harm,” and it’s what Rob would want new investors to stick to.
According to him, going against magnates such as Warren Buffett and other hedge funds because you think you’ve accurately timed the market is a path destined to harm, and not them, but yourself. If you’re new in the game, you certainly can’t beat the world’s smartest investor, can you?
No Overnight Fortunes
Marcello DePascale of Barnum Financial Group says that the biggest mistake young investors make is to convince themselves that they can make fortunes overnight. Though it’s okay to want to succeed, it doesn’t always come as quickly as we’d like, and that’s the sad reality of life.
Therefore, DePascale advises, avoid those pieces of advice about that company that is just about to explode, that bitcoin frenzy, and everything else that has a get-rich-quickly vibe to it. Instead, focus your energy on mutual or exchange-traded funds, ones that are in sync with your long-term goals.
To sum it all up, these are the moves you should entirely avoid if you’re a novice investor. First, don’t kid yourself into researching the best individual stocks. According to Lenox Advisors’ Thomas Henske, this is one top mistake many new investors make, and it consumes time that they could use to learn about the principles of investing.
Rob says that you also shouldn’t waste time thinking about when and where to invest. Just start, because taking that first step is the most difficult part of the process. Once you’ve got your head in the game, you can make necessary adjustments as you go.
And before you start, don’t keep comparing different choices, else you’ll never get your feet off the ground. There’s also nothing such as the perfect time to invest, so you better just get on with it.
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