Even though we try to avoid them, we all make mistakes. It happens even to the best of us. Even when you’re a little advanced in your investing know-how, you can still make bad investing decisions. What’s important is you learn to watch out for them.
Here are a few mistakes you could make as an experienced investor:
1. Letting emotions get the best of you.
The struggle many people experience in their investment journey is dealing with emotions. When your investments go down in value, it’s tempting to withdraw to cut losses. On the other hand, when your investments are up, it’s tempting to quit while you’re ahead. This is why it’s important to have a plan when you invest and stick to it.
When you have a strong urge to withdraw your investment, ask yourself:
- Am I panicking or am I being calm and rational about things?
- What was my reason for investing?
- How far am I from the recommended time I hold on to my investments?
2. Trying too hard.
Maybe you’ve started reading financial news reports more often. Or you’ve started setting aside time to research deeper on what you’re investing in. These are good to do, although monitoring the stock market every few minutes is overdoing it. Here are some questions to keep yourself in check:
- Is the information I’m researching actionable?
- Am I trying to time my investments too much?
- Am I reacting to every movement in the market?
3. Not adjusting your risk appetite.
As you go along your investment journey, things will definitely change. As you grow and learn more though, you may become more capable of taking risks. On the other hand, responsibilities might fall on your lap so you require more stability. Every now and then, ask yourself the following:
- Have my circumstances changed since I started investing?
- Have I had a change in priorities that affect my goals?
- Is there a need for me to have more money in savings or less?
