While investing in stocks, there’s no dictating what to invest in or the right way of investing. What can be said is what you should not be doing.
Don’t be a gluttonous investor.
The history of a stock’s performance should not be mistaken for its strength. Don’t use previous records, be it from the past ten years or the past month – the duration has no relevance – to influence your decisions. What matters is the market which is volatile and susceptible to numerous factors. Another thing to look out for is whether your investments are truly diverse – diversification should be across unrelated markets. Don’t try to grab too much from one spot.
Don’t be a lazy investor.
Don’t stick to a set of companies you’re comfortable with and form a cocoon. Every investment you make should be from proper research. The fact that the stock market is unpredictable should not be a reason to localise your choices. Always explore the market well and remember that your choice of investment should come from whether you believe in the business idea of the stock you’re investing. Another critical point is not to place excessive trust in experts or stock gurus – you must form your own decisions. Don’t throw away your onus.
Don’t be a proud investor.
Don’t spend too much of your time trying to predict the stock market – never assume you or anyone could under any circumstance know when a stock will fall or rise. Don’t oversimplify the stock market. No matter what, it is impossible to know all the factors that influence the values of the stock. Do save your breath and instead study the market correctly and keep yourself up-to-date with market news. Don’t underestimate or overestimate the power of stock.
Don’t be an envious investor.
Do not copy another person’s investment choices simply because you believe their stocks to be more successful than your own. Instead of looking at other investors, focus on the market and the different business ideas thriving within it and base your investments on a genuine understanding of the market. You should be aware of the nature of your investments and why you’re investing in what you’re investing to able to know how it works, what’s happening and what you should do with it and its future proceedings. Don’t lose sight of your own actions.
Don’t be an ill-tempered investor.
Don’t lose patience and immediately buy out. Stocks aren’t always immediate. There’s no meaning behind a short-term investment when it comes to stocks.
Don’t be a rageful investor.
Don’t confuse your success with your ‘smarts’. Success in stock investment is not a success born from intelligent investing. It is not a game of ‘Are You the Smartest Person in the World?’. In the same logic, don’t start shedding away from your investments because you don’t see what you predicted. You shouldn’t be intimidated by falling trends and start selling all your stocks in a panic. Every stock is unique, and you should treat it as such. Make sure you’re not too conservative about how you pick out a share. Don’t be overrun by trends and traditions.
Don’t be a greedy investor.
Never invest without a plan. You can’t go in without financial planning and knowing what to invest in and how to retrieve the capital. Avoiding to pull out simply because you don’t want to pay tax can be deadly. Beware of low liquidity unless you have a solid long-term plan.