Investing may seem like a stress-free side hustle to many. But when you start investing, you will find that the truth is far from this myth, as investing demands time, effort and patience.
Investing is often a tricky game, and if you’re not careful and make even a small investment mistake then you may lose a lot of money. Taking the reference of Rohit Reddy Hyderabad, he is known for making the right investment decisions at the right time and he aims to help people make the right investment moves. Here are the top 4 mistakes that most newbie investors usually make while investing their money.
Blinded by Reward:
Being blinded by the probable rewards on the investments can make you off target when it comes to the risks associated with your investment. Hearing others speak of huge returns and immense profit-taking can make you invest without considering the risks. And, that’s where most people lose their money. So, always do proper research, consider the risks and make wise investment decisions to earn a significant ROI.
Lack of Patience:
Without patience, you can’t expect to make massive profits on your investments, as a slow and steady approach will yield better returns in the long term. Moreover, expecting a portfolio to do something other than what it’s supposed to may land you in a disastrous situation when it comes to investments. You need to make sure that your expectations are realistic, regarding the timeline for portfolio growth and returns. Always remember that success comes only to them who keep patience.
Too Much Investment Turnover:
Turnover, or simply jumping in and out of positions, is another way of losing money. It might seem like you are making greater profits in lesser time, but we can’t deny accepting the fact that transaction costs will eat you alive. This is because the short-term tax rates are usually higher and frequent buying and selling will make you pay more tax. Also, you will be missing out on the opportunity costs of the long term.
Letting Your Emotions Rule:
You must be aware of the fact that the number one killer of investment return is emotions. The axiom that fears and greed rule the market is true. As an investor, you must ensure that fear or greed shouldn’t control your investment decisions. Instead, you should be looking at the bigger picture. Over the horizon, a portfolio’s returns usually don’t deviate much from the average returns. And, patient investors may benefit more from the irrational decisions of other investors. Rohit Reddy Image shows us, how he controls his emotions while investing and takes informed investment decisions that deliver massive returns in the long term.
Concluding Thoughts
These were some of the common mistakes that you should avoid when investing your hard-earned money in various financial assets. Furthermore, these points will help you make wiser investment decisions so that you can make the most out of your investments.
Lisa Eclesworth is a notable and influential lifestyle writer. She is a mom of two and a successful homemaker. She loves to cook and create beautiful projects with her family. She writes informative and fun articles that her readers love and enjoy.