4 Common Investing Mistakes Every New Investor Should Avoid

The best way to achieve returns that beat inflation over time is to invest. Every great investor today has in one way or the other made mistakes when they started investing.

Ideally, mistakes are meant to teach people lessons, and the great thing is, you don’t have to make the mistakes all by yourself to learn the lesson, as you now have the chance to learn from the mistakes of others through their opinions, feedback and reviews as seen on a number of industry publications and third party review sites.

Here are common investing mistakes, sourced from reviewsbird.co.uk, you should avoid as a new investor:

·       Thinking Over It

Well, a lot of new investors make this huge mistake of spending time agonizing on the best stock to invest in. So instead of getting ready to invest, they get ready to get ready. You should understand that the more you think over it, the harder it becomes to draw to a conclusion. Learn about sectors or diversification and you could check some asset management firms for investment plans and start investing as soon as possible, to ensure your investment has enough time to grow. So stop procrastinating and invest!

·       Lack Of Emergency Fund

One of the biggest mistakes new investors make is not making provisions for emergency funds before they start investing. It is very important to build up a reserve of cash for when emergencies set in. Emergencies like when you fall ill and you need to pay hospital bills. The last thing you want to do is sell your stock early or run into debt; Build emergency funds!

·       Investing Too Much At Once

As a new investor, you should practice investing with a smaller amount, till you get more used to the market’s volatility. For instance, It is better to watch the 30% of your wages go up and down with the market, than watching the 100% of your wages go up and down with the market. Decide on the amount you want to invest for a start; start little and gradually ramp up from there. This way you avoid selling your shares earlier as well as avoid  emotional instability.

·       Not Investing Enough To Cover Future Needs

This is very important when you’re investing. A lot of people invest for almost their lifetime and when it comes to enjoying their investment at their retired period, it turns out their investment would not be enough to sustain them in a long time. As much as you could take the big step of starting an investment, you would need to put that same energy into investing frequently in your shares. This way you have enough for the days you would be needing this investment the most.

Conclusion

These mistakes have been made by great investors today. As a new investor you need to find your own style of investing, be disciplined and consistent. It’s a matter of time before you have diversified investment and your interests begin earning interests.