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How To Avoid These 5 Common Investing Mistakes

Updated: Aug 29, 2022

1. Using mutual or managed funds


If you want to invest in stocks but don't have time or expertise to actively manage it, then the best strategy is to invest in S&P 500 ETF.


You get to invest into the top companies and diversify automatically.


Check here to understand why it's the best investing option for you.


2. No exit strategy


If you still decided to pick specific money then have an exit strategy. This includes knowing when to cut losses when the company's share price started to decline.


This forces you to think and understand the value & competitive advantage of the company you're investing with.


3. Not knowing IPO pitfalls


Investing in IPO is also a good option especially for those low money to invest. However, you should know that:


* IPO could be an exit strategy for the company’s founders and early investors, realizing the full profit from their private investment (share price goes down).


* It typically takes 2-3yrs flr a newly-listed company to materialize its projects and thus improve financial numbers, which will equate to increase in share price.


4. Paying trading fees


This is something you can easily avoid with lots of trading platforms not charging fees anymore.


The only thing you want to ensure is that you use a trading platform that is stable enough not to go into bankruptcy. If you're unsure why, then google difference of CHESS broker and Custodian broker.


5. Not enough cash investment


Most people fall into this trap, without understanding that you'll need sufficient cash investment to receive decent earnings. There could be anomalies into this where share price just skyrocketed, but that would be a bonus if ever.


What you want to focus on instead is to build your cashflow. Then invest into stocks to grow it further, instead of it sitting in a savings account (which is less than inflation and you're losing money).


If you want to build your cashflow and invest on a project with a passive income opportunity, click here for overview.


#stockinvesting

#ipo

#mutualfunds

#investingmistakes

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