Common investment mistakes, You’ve saved some money and are now looking for a profitable investment, or you’ve borrowed money to invest and must repay your debt.
If you choose the wrong investment, you may not get the expected returns, or you may find that the capital you invested is either depleted or entirely wiped out, leaving you with nothing.
Before we get there, here are a few mistakes that new entrepreneurs make that, if avoided, could result in them reaping the full benefits of their investments.
Inadequate understanding of the investment
According to Simon Gathecah, founder of financial consulting firm Pearl Insight, the first mistake people make when investing is failing to understand how the investment will earn them money. This could be because it has been over-promoted on social media and everyone is looking to make a quick buck.
He claims that impatience is another pitfall that many aspiring entrepreneurs fall into. Most investors, for example, will abandon an investment if it does not double their money within a certain period of time, which is usually only a few weeks or months.
“Ideally, you should hold investments for as long as possible to maximize your returns,” he says, adding that it’s also important to understand how long you should keep your money in your preferred investment vehicle before liquidating it.
When it comes to various sorts of investments, such as the stock market, Gathecah emphasizes the importance of time, and that you should never invest when it is too late.
Investors, according to Thotho, should not be driven by fear or greed. They should concentrate on the big picture instead. For example, stock market returns might vary drastically over a short period of time, but if you invest in quality stocks over time, you can expect a consistent average return. He claims that a portfolio’s results should not differ significantly from the averages over time.