No one has ever said investing was a walk in the park.
But you’d be surprised how many are making it near impossible to find success.
That’s because they try a million different things. They get far too wrapped up with too many ideas. And they lose track of one of the best ways to make money today.
Unbelievably, an astonishing nine out of every 10 investors fail because:
- Many don’t have good training, or guidance
- They’re not aware of risk, thinking the stock market is a “get rich” scheme
- They don’t think long-term. They want instant gratification.
- They blindly follow the crowd, becoming one of the sheep
- They fail to trade without emotion.
- They fail to trade with a property strategy or even diversify.
- They fail to learn from their mistakes.
In addition, one of the worst things many investors – especially new ones do – is they get caught up in what the press hounds would have them believe.
But that’s a great way to lose money.
Everyone in conventional financial media shouts about their favorite stock picks.
But we believe that if you really want to become a better investor then you need to be looking at where the smart money is heading. You need to understand what is truly driving the markets and how you can take advantage of these moves as – and before – they hit the mainstream.
That’s how the long-term wealth can be found.
However, to truly achieve success, you must avoid the top mistakes we mentioned above.
Some of the other top mistakes include:
Top Mistake No. 1 – Riding your Losses
Some of us never want to give up on a trade that we truly believe in. However, it’s never a good idea to let your losers ride. Admit you were wrong on a trade, and jump out. Now, that doesn’t mean you can’t buy it again. But for the time being, let it go.
Top Mistake No. 2 – You Don’t Use Stop Losses
This is one of the worst things any trader can do. One of the biggest issues facing all walks of traders is a severe lack of discipline and structure in stock buying habits. Many fail to use stop losses, or even protect gains with a simple trailing stop loss strategy. Others risk far too much.
A friend of mine once made 325% in a week’s time on a trade.
Then he risked it all on the very next trade that cost him 90% of that 325% winning.
That’s a recipe for disaster. A trader with no plan for action has already lost.
Top Mistake No. 3 – You’re Betting too Much
When it comes to investing, many of us get over-excited. We believe we found the “must own” stock of the year that could run 1,000% or more. We wind up risking far too much of our portfolio. Remember, there’s no such thing as 100% certainty with stocks, though. Risk perhaps 1% to 5% of your portfolio on a trade. And work up from there if you find great success.