10 MISTAKES EVERY INVESTORS MAKES & HOW TO AVOID THEM

1. Playing Without Rules: By creating strict criteria, it places limitation on the investor and takes the emotion out of the decision. These rules provide a clear exit strategy with deadlines so as to minimise downsize and eliminates the need to make an important decision that is influenced by emotion or hope.

2. Ignoring Taxes and Fees: Always work on profits after tax & fees and not apparently looking profits.

3. Confusing Investing With Trading: Investors care about companies, they look it as opportunities to create wealth rather than income, look for companies performance over a time period. Investor’s most important thing is to protect from losses. They should not go for hot stocks or making quick profits. Investor should buy something that has strong leadership, great business plan and competitive edge that will continue to increase corporate earnings for years to come.

4. Letting The Media Influence Decisions: The market and future is unpredictable. Media creates excitement that drive short term movements but it have no relevance in long term. Ignore media influence and remind yourself why you purchased equity in first place and ask if those same reasons still exist.

5. Taking Too Much Risk: Losing money is the only thing keeping investors from creating wealth. Too much risk generally goes against investor.

6. Failing To Readjust Portfolio: Depending on your age, risk tolerance and investment horizon, draw a asset allocation and built a well diversified portfolio. As same asset classes will earn more than others, over time your portfolio will becomes unbalanced and require you to make adjustments to get back on track. These steps are often ignored, but should be a vital past to your investing strategy to maintain a balanced, protected portfolio.

7. Denying Defeat: When an investment doesn’t go the way it was intended to, investors often make a big mistake of holding on to their losers in hopes that they will rebound. This should not be the case, as the investor’s rules should have a clear exit strategy for both winning and losing position. Nobody wins all the time and admitting that you were wrong can be tangent thing to do. It’s important to evaluate the position by asking what went wrong- whether a fundamental change in company or something overlooked earlier or valued inaccurately or just a short term reaction that provides an even greater opportunity. If you decide that this is no longer something that you would like to invest in cut your looses rather than watching it continue to fall in value. Don’t let your ego get in the way of investing decision.

8. Improperly Valuing Investments

9. Acting on Stock Tips: If professional investors can’t accurately predict the direction of the market, chances are your friend is not capable of giving you advice. You have to know company well enough to make that decision for yourself.

10. Timing The Market: Trying to time the market is a loser’s game and for the long term investor it should be an irrelevant concept. By regularly investing you take advantage of market fluctuations, buying more shares when market goes down and being a part of winning crowd when it goes up. Market timing does not have a place in wealth equation. The only thing worth timing us to be is the stock market, because over time history proves that it will only go up. That’s the only way to outsmart the market.

The investing mistakes listed in this report are common among seasoned professional investors and amateurs. Learn to avoid these mistakes and firmly stick to your investing strategy and you will produce respectable returns on your investment.