Beginner investors are usually easier to make mistakes, but also easy to bounce back and take lessons from past mistakes. However, you can be much more successful if you learn from other people's mistakes while avoiding the mistakes occur to yourself.
The following are common mistakes that typical young investor. Hopefully these errors can give knowledge to you so you can avoid it:
1. Putting off plans to invest.
Procrastination is not a good thing, especially in terms of investing because the market situation is rapidly changing. A very appropriate time to start investing is very difficult to determine. After much research, usually ideas and time to start investing like it just showed up.
You should be more ready to act before the market situation turned around, so you do not need to depend on market situation. Usually, due to lack of experience, newbie investors are sometimes not confident with his decision in investing.
2. Speculate rather than invest.
A young man had plenty of opportunities to invest in his life. An early age usually affects the risk he could take. Thus, young investors are more likely to take high-risk investments, but with high returns as well. Why?
It is because when young investors lost a lot of money, he still had plenty of time to start investing again from scratch. So do not spend time just to speculate, but immediately invest.
Speculation is usually done by young investors because of the lack of information or do not understand correctly about investment options. This is dangerous because there are many senior investors can take advantage from these young investors.
Instead of having to speculate or gamble, young investors should do lots of research, or looking for high-risk enterprise, but with the potential income is also high for the long-term. Take advantage of your young age to take risks because the result will be worth it.
3. Too much spending money.
Investing in large quantities can be a double-edged sword. As mentioned earlier, if a young investor suffers losses, he had plenty of time to get up and start investing again. However, similar to speculate, too much spending money without enough information can destroying the portfolio.
4. Less asking.
If the stock market is falling, young investors are usually optimistic about situation. They believe that it will soon improve in the near future. What happens next is usually the opposite. One important factor in making decisions in this kind of situation is to ask 'why'. Do not just stay silent. Young investors should be able to maintain and responsible for a good portfolio.
Do not be ashamed to seek input from senior investors because they know more about what happens in the market. Do not take bad decisions in the uncertain market situation.
5. Not invest the money.
As mentioned earlier, investors have an advantage to see a high yield in the middle of the high risk of long-term basis. Younger people will have more opportunities to bypassed risk while still young.
A young person is usually having less experience in money management. They think that the money should be spent right away, without looking at the long-term. Spending money without thinking about retirement saving or deposits can hurt you.
Conclusion:
Young investors should take advantage of his youth age to seek for experiences as many as he take the risk. Early learning of investment can help you in designing a solid portfolio. Indeed, there are many risks to face. But, at least, risks and mistakes can help young investors to gather such a valuable experience.
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