No matter whether you’re just staring out with your first investment or have been investing for some time, there are some all too common mistakes that you may be making. Investing mistakes that can be robbing you of potential earnings. So then just what are they, and how can you avoid making them?
Easily one of the most common investing mistakes, is not setting, and sticking to a set of financial objectives. For instance, if you need to have ready access to your investment for liquid capital, perhaps a money market fund may be your best choice. Be aware though, that by going with this option, you may have to trade off potential high growth, and some tax advantages.
Still one more common mistake that you can make, is not adequately understanding risk factors as they pertain to growth potential. In short, there is no perfect, “risk free” high profit investment, although some may be presented to you as such along the way.
Now experienced successful investors understand and have learned how to accept, and deal with investment risk factors as they present themselves. Risk vs profit potential trade offs are all just part of investing.
Not knowing all the different advantages and disadvantage that come with long and short term investing, is yet one more all too common mistake. As an example, one form of long term investment that comes with great tax advantages is an IRA, so if you have one where you work you may want to take advantage of it.
Finally, going it alone and learning your lessons “on the fly” is the best way to learn some tough and expensive investing lessons. Do things the easy way and talk to a qualified investment adviser. At least when you’re first staring out. Remember that knowing all your options broadens your playing field.