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7 Frequent Mistakes in Stock Investing to Avoid for a Successful Future

Artikel diperbarui pada 13 Maret 2023.

Mistakes in stock investment are things that must be avoided by those of you who do play in this case. Usually the mistakes made tend to be things that are considered trivial and not too concerned.

If you look at the general definition, investment is the activity of investing money or capital (valuable assets) for the purpose of making a profit. Someone who invests in a business is called an investor.

Meanwhile, shares are the value agreed upon in every cooperation between investors and parties who need capital. The amount of shares usually depends on how much capital is issued by the investor.

For now, investment is one of the strategic factors in economic activity. The name investment is better known to people as capital investment.

In this modern era, investment is something that can be done by everyone. Not only rich people and officials, private employees can also do it.

The availability of several platforms that can be used with a low nominal capital figure can touch all circles to play. However, there are some mistakes in stock investment that are often made.

Therefore, it is important for you to know what mistakes are often made. With the aim that you do not fall into the same hole. For beginners, this article is very relevant before deciding to play stocks.

Although it will not absolutely make you rich, minimizing any losses that will occur is an obligation in investing. To shorten the words, here are 7 mistakes in stock investment that are often made:

1. Delaying Investing – Mistakes in Stock Investing that are Often Made

Often there are several reasons that are always thrown out by someone when they want to start investing. Like waiting for capital and the right moment with lucky analysis results.

Of course this is a mistake in stock investment that is often done. The analysis carried out must be based on science, not luck. Starting sooner with all the preparations, it will be much better than putting it off.

2. Not Having a Financial Plan – Investment Mistakes for Fear of Losing Money

Investing is not just about how much profit you will get in the short term, but the main purpose of investing is to meet future needs.

Therefore, it is important for every investor to have a clear financial plan, because in this case profits are not always obtained monthly like employee salaries.

The mistake in stock investment that is often made is not having the right financial plan. And tend to use kitchen or household money to invest.

Of course this is the wrong way, because the money used for investing must be cold money and not disturbed by the needs at home.

3. Investment Misconception – Investment is Not Gambling

The next mistake in stock investment is investment misconception. There are still many novice investors who have not been able to distinguish between investing, saving, trading, and gambling.

This is because many are still tempted by the lure of zero/low risk, high return investments. As a result, many novice investors then invest in products that do not have underlying assets or future cash flow.

4. Giving Up Easily – Mistakenly Thinking Investment is a Quick Way to Riches

Investing in the stock market is often said to get profits as quickly as possible, so that when once it loses, investors will leave it. They feel that stock investment is not their passion because they have lost.

Therefore, stock investment strategies must be learned and mastered, such as fundamental and technical analysis. This principle is often forgotten by investors, especially for beginners.

5. Forgetting Risk – Mistakes in Investing in Stocks and Other Instruments

The principle of high risk, high return actually does not only apply to investment. It’s just that there are still many novice investors who are too focused on the lure of the results offered (expected return) and forget the risks faced.

When deciding to invest in stocks, although you want to make a profit, you also have to mentally prepare for losses. Because investing always involves risk.

Therefore, it is necessary to weigh and know in advance the risks of each stock investment that will be made. This is so as not to be too surprised when experiencing ups and downs on the way.

6. Emotional – Many Beginners Make This Mistake When Transacting Shares

Novice investors often make an investment action because of emotional factors. Usually, they see a growing market trend, without analyzing it first, they immediately decide to join in.

The result of this kind of action is a mistake in choosing the type of stock, and worse, falling into the trap of fraudulent investment.

7. Using the Wrong Techniques – Causes Beginner Investors to Fail

When you start investing, of course what you have in mind is a profit that runs out so quickly. It does not rule out the possibility of all that happening, provided that the techniques used are in accordance with the provisions.

Although there is no guarantee of success, at least when using the right technique, it will clearly reduce the risk of losses that will occur. As much as possible, use basic techniques in investing in stocks.

Stock investment is a fast road to success, but also a fast road to poverty. Because every possibility can happen, even if the chance is only one percent. But it can be minimized.

An effective way to minimize losses that will occur is to not make mistakes. Therefore it is important for everyone to know in advance some mistakes in stock investment.