MISTAKES THAT BEGINNER INVESTORS OFTEN MAKE WHEN STARTING TO INVEST IN STOCKS
Many business owners are secretly drawn to stock investment after hearing stories of other entrepreneurs' success.
Many business owners are secretly drawn to stock investment after hearing stories of other entrepreneurs' success. Others are inspired by reading stories of others on social media. Others are motivated by a desire to improve their unstable financial situation.
Sadly, however, many novice investors are discouraged from investing in stocks after experiencing significant losses.
Interestingly, these losses aren't due to poor stocks, but rather to their own mistakes when they first started.
These various mistakes arise because investors do not understand the basics before buying shares for the first time.
Investing Without a Goal
Many novice investors buy stocks simply because they're trending and being talked about by other entrepreneurs.Without a clear goal, novice investors don't know whether they're saving, seeking additional income, or simply trying their luck.
As a result, their decisions often change at any moment and are easily influenced by emotions.
Risks Often Underestimated
Another mistake novice investors make is ignoring risk management. Many of them immediately go all-in by allocating all their capital to buying a single stock.The hope, of course, is that they will reap significant profits and join the ranks of the new rich.
However, when the initial process began with stock prices plummeting, panic immediately set in.
There was no backup strategy for anticipating this situation, so he could only accept the situation.
In fact, if he had spread his capital across several types of stocks or adopted a gradual buying pattern, the risk of major losses could have been avoided.
It was obvious they were focused on the price spread moving up and down on the app's chart.
Every small increase in the stock price would trigger a smile, while the slightest decrease would turn their faces into anxiety.
Focus on Daily Movements
From my personal experience, when I saw friends trading stocks, they would never take their eyes off their trading apps for a moment.It was obvious they were focused on the price spread moving up and down on the app's chart.
Every small increase in the stock price would trigger a smile, while the slightest decrease would turn their faces into anxiety.
Daily price fluctuations are actually normal in the stock market. However, if they monitor them continuously without sufficient knowledge, they could actually lead them to make the wrong decisions.
Emotional Dominance in Decision-MakingAnother common mistake is a lack of basic understanding of stocks.
Buying a stock without knowing the performance of the company that owns the stock can be very dangerous.
It's like starting a business without understanding how it generates income. In the long run, this approach is unlikely to yield optimal results.
Furthermore, emotions dominate decision-making.
Another common mistake novice investors make is a lack of basic understanding of stocks. As a result, when they first invest in stocks, they often experience losses.
Buying a stock without understanding the performance of the company that owns it is very dangerous.
It's like starting a business without understanding how it generates revenue. In the long run, such a business approach is unlikely to yield optimal results. Furthermore, emotions can be a dominant factor in decision-making.
The fear of losing money and the desire for immediate profits often lead novice investors to break their previously established plans.
Instead of achieving substantial profits, they can end up bankrupt and without a penny left in their personal account. Investing in stocks should be viewed as a long-term process that requires patience.
Therefore, it's important to recognize some of the mental mistakes that many novice investors frequently make. I've discussed this in another article about mental mistakes that make it difficult for investors to profit in the long-term. If you can identify these, you'll gradually increase your chances of maximizing profits.
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ECONOMIC AND BUSINESS