3 Common Mistakes of DIY Investing to Avoid
About a million Canadians established trading accounts in the first half of the year 2020. This has been attributed to a lot of spare time on hand due to the lockdown restrictions imposed worldwide to curb the spread of coronavirus. However, the Investment Industry Regulatory Organization of Canada (IIROC) revealed a few danger bells that one should heed before investing independently.
What is IIROC?
IIROC is a finance regulatory body established in Canada which overlooks the 175 investment firms in Canada, including the big banks that offer opportunities for direct investment.
Lucy Becker, a member of IIROC, analyzed that it is entirely natural for people to gain from a bearish market and enter the field of investment; however, these novice investors are susceptible to incurring great losses. According to Becker, not all who invest privately are fated for doom. Many may succeed in their bet too. However, one should stay on high alert to avoid making grave financial mistakes.
Some common mistakes to avoid:
1. Investing in complex stocks
Becker advised against investing in complex stocks. Stocks that are very volatile and difficult to understand can jilt you halfway on the journey.
2. Amassing capital by borrowing from credit cards
One other general mistake made by many independent investors is of accumulating capital through loans. You might make a profit on your shares, but your profit could also be gobbled own in form of interest payments on your credit card or loan. This leaves you with nil in terms of actual gain.
3. High cost of managing funds
There is also a limited understanding of the cost of buying and purchasing shares. Buying and selling shares also break down your capital and thus novice investors should make informed decisions and avoid impulsive buying and selling.
Becker’s advice to independent investors is to deal only in the stocks they understand thoroughly well as to be able to track its market changes and thus the rise or fall in the subsequent price of a share. Additionally, he advises that whatever means one acquires to invest in stocks, one should remain vigilant about the related costs of investments and try to restrain them in order to protect the profits from getting wiped out.
More in Investments
Career Coach Helen Horyza’s Tips For a Smooth Transition Into a New Career
It’s very common for people to feel stuck at work. With the economy so distraught and unemployment levels rising more than...November 3, 2020
Answers That Could Make or Break Your Job Interview
Getting a good job can sometimes be challenging. There’s so much competition and so many screening processes to deal with. There...October 30, 2020
4 Vital Self-Care Tips to Keep Thriving Entrepreneurs Sane
If we told you that most Americans are stressed, chances are you wouldn’t even be surprised. Especially in the past couple...October 30, 2020
How to Invest in Mutual Funds for Short-Term Gains
Money breeds money. The age-old phenomenon that if you are rich, your riches will pave the way for more wealth rings...October 29, 2020
Tips For Young Professionals to Save and Invest Wisely For the Future
As a young professional, you must have heard of the age-old advice that when investing, the general rule of thumb is- the...October 28, 2020
Shaming or Empathy – What’s The Right Approach For Financial Advice?
Who hasn’t made mistakes in life! Whether it’s to decide about complicated relationships or handling loans and finances, everyone has that...October 28, 2020
You’re Already Behind on Your Retirement Savings? Here’s What Experts Have to Say
Retirement may seem far away when you’re not yet 30, but it’s never too early to start saving for your future....October 26, 2020
Revamp Your Investment Portfolio with These Smart Investing Tips
If you’re looking to make long-term investments to grow your wealth, you have to make sure to employ the correct strategies....October 24, 2020
Expert Advice on Investment From Peter Lynch
At some point, we all want to grow our financial status, and the best way to do it is to invest....October 24, 2020