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| Photo Credited to Oley Ivanon |
Knowing and avoiding common mistakes in investing will help prevent you from losing your money in the market. Money is like wings and it will fly away to heaven like an eagle from your investment and leave you financially drained if you don't learn these common investing mistakes.
So in this blog post, we will show you by these outlines you need to learn and quickly avoid the same mistakes young people make.
1. Case Studies on Common Mistakes in Investing Most People Make in the Capital Market
Common Investing Mistake 1: “Mr.Too Know” Attitude
Mr.David was paid well, but he was retired from work, leaving him N10 million as his retirement benefit in his saving plus bank account. But he felt that Nigerian Breweries Plc was doing so well after depositing in Wema Bank Plc so he withdrew N10 million to invest it in this company for N120 per share, but he was advised to wait till the share price would come low, but he said “I too know” .
But sorry, he collapsed for about two months as he read in the local paper that the price crashed to N 38 per share. The ‘I Too Know’ Attitude is dangerous that you should avoid.
2. Common Investing Mistake 2: Financial Irresponsibility
A real man had more than ten million dollars to his name. And he was so rich, but he lost million dollars he made money from business ventures and investments where he hired the group of investors to manage his money because he was too busy in his business ventures to watch and control carefully where his money had gone and come. This is a great warning to everyone of you who read this article.
Common Money Mistake 3: Happy Meals
There are another real man that found his bank account drained or depleted quickly because he thought that ten of thousands of dollars in his bank account would continue to come like a money spinning machine after he spent all his money on happy meals like a prodigal son. He said, "We have nothing to show for it because we waste our money recklessly on happy meals".
Ten Thousands of dollars in his bank account deceits him into wasteful happy meals as if he thought his money wallet will never drain. Uncontrolled excitement and desire mislead him.
Common Investing Mistake 4: An Excuse Not For Investing
Two male married employees were met and admonished to invest in stocks for future security while they were outside their work offices, but one of them, Mr. John excused that he could not invest in because of their family that he wanted to take care of them with his salary while the other obeyed this advice once..
And fate would be on them because an early retiree, Mr John, was died of stress before his gratuity was dropped in his hand while the other was resilient to where he invested and sold so as to set up his own retail business from scratch successfully after they were disappointed many times as their former boss promised them with gratuity.
Common Investing Mistake 5: Greed
Again, K. Scott promptly emptied his bank account to invest in a company as a smooth talker promised him quadruple his money only the week before if he invested in this company, but he only found himself swaddled with a debt that nearly ruined him. Greed and puffed-up ego as he was in front of a large audience cost him dollars.
Common Investing Mistake 6: Ignorance
People lamented their woes and defeats, and they complained that they lost thousands on internet investment programme or the other because they thought the money would just come out of the computer like ATM after they paid ten of thousands to the people in the name of seminars. Ignorance wipe out their capitals and leave them financial dry.
Common Investing Mistake 7: Mental Poverty
Many investors think they are smart, and they do not need to attend seminars, but they lost a lot of money to discerned investors because they do not acquire enough knowledge from seminars some times.
I told my friend to go and sell share of bank stock for N45 per share to make up to N300,000 he bought it for N10 with N50,000, but he refused because he wanted dividends every year for life as soon as he found that he received N5000 as interim dividend and N12000 as final dividend for the first time.
And I left him alone because he wants dividends for life but he forgot that it can make poor if he has only one stock or if he doesn't use investment strategies that can turn him into wealth later. The problem is his mentality.
Common Mistake 8: Rely on Guesswork
One day a young adult in this country came across a columnist on investment in the local paper and then asked him what stock to buy, and the columnist gave him ten stocks to pick up it to buy it, but the young man asked him again which stock is better that would make him a millionaire. Then the stock market columnist gave him three stocks out of ten stocks to buy it. And the man did it.
But later he found that share prices of stocks he bought had gone down gradually as he read it in the financial report on stock market prices. And he called him again and asked him about it, and the stock market guru told him not to worry because it would rise again.
But share prices still falling down made him worry and called him and asked him what happened to three stocks in the stock market, and the columnist refused to respond him. It means he switched off his phone from him. And the young man lost what he invested and it could not recover. And it is a warning to everyone of you who try to ask what stock to buy it
How to Avoid the Same Money Mistakes as People
1. Avoid Greed and Pride
Many people lose tens of thousands because of their greed as if they want more and they lose a lot of money because of their “Mr I too Know’ attitude or arrogance as if they know everything or they do not need expert facilitator(s) to teach them from their organization(s). Greed and pride eat up your wallet if you do so, and it is a warning to you that you should avoid it to build wealth over time.
2. Avoid Ignorance
A trained-well man buy a stock at N5 because he knows it is going to ride. An ignorant man buy a stock at N50 because that is when he heard a rumour about it from some people. To avoid Ignorance that could be draining your wallet is to buy knowledge first or attend a seminar first.
3. Avoid Depending on Guesswork or Pure Gambling
The question people ask many so-called stock market gurus or coaches has made them lose tens of thousands in the past. The question people often ask the stock market gurus or investment columnists is: “What stock to buy?” “What stock should I buy now?” “Which stock to buy that make me a millionaire?”.
People lost money in the stock market because they rely on guesswork or gambling for s short term without analyzing what stock they should buy for future harvest.
4. Never Rely on Hot Recommendations on Stocks
People lose money in the past because they reply on hot recommendations in the local paper or from stockbrokers. So never buy based on hot recommendations. Buy only based on financial analysis on stocks ,and it will save your time and keep you protected from losing in the capital market.
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