whether you're about to start investing for the first time or you've been
investing in the stock market for quite a while
mistakes can happen at all different levels in honor of the upcoming
Halloween for 2018 I wanted to make a video that covers
some of the most common but scary investment mistakes that I've seen
throughout the course of my life now sure this guy is pretty scary but the
idea of losing your hard-earned money very quickly in the stock market money
that you've worked so hard to earn probably working on a job you don't like
now that is truly terrifying! in this video I hope to help you recognize and
avoid as many of these mistakes as possible in your investing journey I
have four common investing mistakes to share with you in all so let the felling
begin as we cover these mistakes and as we go through the video pay close
attention to how interconnected these mistakes actually are to one another
you'll be amazed the first common error when it comes to investing is lack of
risk management one of the first Astra buttes that
causes higher risk is lack of a diversification in one's investment
portfolio this is when an investor puts a large percentage of their total
capital into one or two stocks such as Amazon or Facebook and neglect
diversifying future funds into other investments how many of you guys know
somebody right now who is doing this this strategy can go on smoothly for
quite a while maybe even years at a time if they pick the right stocks but it's
only a matter of time before this type of investor gets burned
I myself have experienced this but luckily I didn't have too much money at
stake the Knicks item I associate with risk management is position sizing
accompanied with lack of diversification and risk is its cousin known as position
sizing position sizing is understanding how much money to invest into any one
stock or investment at any given time to protect once capital one of my close
friends knows a guy who will invest over 80 to 90% of his account balance at a
given time to trade one stock and that one stock is best buy usually
every time Best Buy is about to release a new earnings report that's when this
investor comes into play this is someone trading 30 to 40 thousand dollars all
within a few minutes to make a quick one or maybe a 5% return on his or her money
to my knowledge this particular investor has not made much money implementing the
strategy because they're right on Best Buy as much as they are wrong in trying
the time when to purchase and sell the stock when you look at such a short
trading period it's really a gamble would you put 90 percent of your capital
in your brokerage account at risk to make a quick 1 to 5% return I sure hope
not also associated with risk is actually an investor who doesn't take
enough risk do you know someone who is constantly talking about how they need
to save for retirement but they never seem to get around to doing it some are
fearful of another market crash and some just do not want to part with any extra
cash they might have to invest not investing at all is one of the biggest
risks out there when it comes to risk management so I hope you don't find
yourself in that boat the next most common investment mistake is over
relying on the opinion of others now how many of you be honest have actually
asked someone for investment advice or you've asked somebody for a hot stock
pic or an ETF what mutual fund to buy etc I know when I was younger and I had
no experience I certainly have I can't even begin to tell you guys how many
questions and private messages I get over YouTube and in my daily life about
this kind of stuff people ask me all the time Mike what stocks are etf should I
buy and I'm truly honored that you guys value my opinions and my thoughts that
much it means a lot to me it really does but you should never take someone's
opinion at face value even if it's coming from me or some other youtuber
always do your own research just because you hear someone speak highly of a
particular stock or investment doesn't mean it will be the right investment for
you for example two people could purchase Apple stock one person could
make money and the other person could lose money all depending on when they
buy and how they manage that particular investment the biggest issue here with
this in my opinion is that when somebody reaches out to me for investment advice
of what stock should I buy how should I allocate stocks in my portfolio or what
I get the feeling that that person has not done any research there they're not
willing to put the time in to learn how to invest and what to invest in in order
to meet their own individual goals and in my opinion that's the big issue here
is that they need a person needs to take some time to learn what they're
investing their hard-earned money in don't just rely in my opinion don't just
rely on others opinion at the end of the day it's your money and when you place
that investment all that is on you it's on nobody else it's your choice and so
you have to live with with it whether it goes good or bad so to hedge this risk
take time to learn what you are investing in read books on investing
educate yourself before throwing your hard-earned money at something just
because your friend or someone else told you on YouTube do not invest in
something that you do not understand it will get you in trouble fast even if
you're working with a financial adviser take time to understand what they would
like you to invest your money in ask the adviser why they think that would be a
good investment and why would that be a good investment for you remember no one
and I literally mean no one will take better care of your money more than you
so make sure you are educating yourself in these areas and not over relying on
the opinion of others the third most common error is investing with your
emotions and not with your head people who do not invest or who are new to
investing do not understand how emotional investing can actually be
watching the stock market and the value of your investment go up go down go up
go down several times a day can be very stressful now just as you might want to
sit there and watch the stock market and your stock investment or whatever you're
invested in do its thing do its little dance on the charts you
have to watch your emotions just as closely some of my largest investment
mistakes I've made in my life stem from the lack of emotional
discipline I mismanaged some of the best investments due to my emotions getting
out of control had I controlled my emotions that made better decisions my
portfolio would probably be worth an additional five to ten thousand dollars
more than it is right at this moment
it's not funny man all because I was letting my fear and emotions drive my
investment decisions getting control of my emotions took years it really did but
if you play your cards right it will get easier and easier for you over time as
you learn to recognize and learn how to mitigate some of these common investment
mistakes you'll actually become more emotionally calm as you start to do the
right types of things with your investments it will calm you down and
emotions will be less and less of an issue for you in the future
like I said though it took me years like three or four years until I got to that
point aside from the things we have already discussed here are a few extra
tips to calm your emotions the first one is only invest money that you can
actually afford to lose number two stop consuming the majority of the articles
written by the media hundreds if not thousands of articles are written about
companies every single day but I can tell you from my personal experience
they are not written for your benefits they are written because that is the
author's day job and that is how they make a living their main priority is to
make money and to get you to read their articles every time I was influenced to
purchase a stock or sell a stock based on an article I read online that
decision turned out to be the wrong decision eight out of ten times it was
absolutely ridiculous so because of that experience I now ignore most articles
written about companies I'm invested in the next thing you can do to ring in
your emotions is stop day trading short term trading is not for the faint of
heart so I do not recommend it for most people especially if you're brand new to
investing active trading can take a serious toll on your emotions and your
health what I have found is that over 80% of people who actively trade stocks
not only do they lose money they consistently lose money doing it how do
I know because I used to do it and it was no fun
no fun I quickly lost $3,000 pretty darn fast
the moment I quit trying to time the market and started investing for the
long term is when I started to consistently make money in the stock
market oh my gosh my wife was so thrilled
when I told her I was gonna stop trading stocks she was so happy because I was no
longer she knew that meant I was no longer gonna be an emotional wreck when
it came to investing now we're gonna move on to the fourth and final mistake
and this last one is the mistake I considered not only to be the most
common but the biggest mistake of all that I see new investors make and even
some experienced investors this Nix item of the discussion this next mistake it's
truly what separates in my opinion the amateur from the professional the fourth
most common investing mistake is investing without a strategy goals or
any sort of plan whenever someone asks me over the internet what to invest in I
immediately know they do not have an investment plan in place they probably
have no idea what they are trying to accomplish in their portfolio and they
do not have investment goals now for most people and including myself at one
point this is the last thing that an investor usually does is they usually do
all their investing upfront and then later on they go back and make a plan
it's completely backwards you want to start with making a plan first and then
start investing now let me ask you guys this when somebody is about to go start
a business what is usually the first piece of advice they're given anyone
anybody let me help you out it's to go make a plan to write out a
written detailed investment plan before ever starting the business and investing
is really no different before starting your investment journey write out an
investment plan your plan should include some of the following items define what
your investment goals are what do you want your portfolio to do for you in the
future 20 30 40 years from now how will you
educate yourself on learning more about investing how much money are you willing
to invest every single month without ever touching it again until you have
enough to retire how will you behave or act if the stock market loses 50% or
more of its value how many different investments will you own what industries
are sectors of the market will you invest in what areas of the market are
you most knowledgeable about based on your work experience as I wrap up this
video today guys I want to say that don't kick yourself if you find yourself
making these mistakes to be honest I've made
every single mistake that I've mentioned this video and I've made it multiple
times so don't be down or too hard on yourself
if you've done these things but just know that it's time that these are
mistakes and it's time to correct them and once you do so your investment
portfolio might start to make money and you not only that is you'll start to
calm your nerves your emotions and you'll begin to become a better and
better investor over time now just like most other things in life making
mistakes is truly part of the learning experience like I mentioned earlier in
the video it took me about 3 to 4 years to overcome these mistakes until I felt
like I had a good grip on every single one of these areas I hope that by you
taking the time to watch this video and follow some of these guidelines that it
will help you minimize your mistakes as much as possible and lead you to be able
to manage your investments more effectively with higher profits and
growth in your portfolio going forward now to keep this video as short as
possible for you guys have only really discussed four mistakes but I know
there's a lot more common errors out there and when it comes to investing so
I would love to hear from you guys down that comment section down below let me
know what mistakes you see out there and what you've done to correct them if
you're and if you're brave enough share some of your own personal horror stories
when it comes to investing now I would love to hear what you guys have to say
about this kind of stuff and get your thoughts down in that comment section
down below hey guys well if you liked the video today make sure you smash that
like button before you leave share this information with a friend especially
somebody who's either new to investing or really enjoys investing I'm sure
they'll get a lot out of the information presented in this video I've included in
the description section of this video some links to these some cool articles
that have a bunch of common investment mistakes besides the one I mentioned
here today so make sure to check them out some are written by investopedia and
some other websites as well other bloggers who who would like to invest a
lot so make sure to check them out and if you're not already subscribed to
money in life TV well welcome to the channel here on money in life TV our
goal is to help you become fiscally fit as we teach finances investing and taxes
and more on a regular basis okay guys well thank you so much for hanging out
with me here once again on YouTube I hope you have a great week I'll see you
all down in the comments section down below take care everybody and remember
now take this information and use it to live your life on gauged have a
great hollowing everybody love you guys peace
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