We all know how good investing can be there are also risks with buying and selling stocks. Fortunes are made but also lost on the stock market so in this post I wanted to look at some of the quickest ways you can lose money in the stock market.
You heard this right! Trading is a great way to stretch your money and reduce your returns by spreading your money too thin. Trading can also rack up the ‘frictional costs’ like brokerage fees and taxes. Instead, you’re better off being patient and waiting for stocks with a wide margin of safety.
2. Borrowing To Invest
When you’re in a bull market the temptation is huge to borrow to invest. If you had successes in investing you assume this will continue and with more money you can build your wealth even quicker. When your stocks are on the way up this may be fine but the problem is when your stocks start to decline in value. Psychologically, you’ll feel under far more pressure if you’ve borrowed money and this will affect your decision making in the stock market which could result in you losing it all. Investing needs to be kept as non-emotional as possible so avoid borrowing!
3. Use Emotion Instead Of Analysis
Investing is a game of patience and analysis not emotion. Emotional investing is almost certain to result in poor trades and bad decision making. We teach about the importance of non-emotional trading ad how to avoid getting emotional about your trades.
4. Get Rich Quick Scheme
I know investing is seen as a potential get rich quick but it definitely is not. A long term mindset is a must-have to provide the best returns from your stocks as the true growth is generally only seen in the longer term so always be thinking longer term when you’re getting ready to trade!
If you’re guilty of any of the above, I strongly suggest to check out our investor training program called the 10 Day Rookie Investor. It’s the perfect way to drop the bad habits and learn the right habits to succeed in investing! If you’re ready to invest then just click here: http://cheekyinvestor.com/10daychallenge/