investing mistakes people makegood stocks help eliminate investing mistakesThe number one goal of people who invest is to try to get a return and make a profit right? Some people however don't invest for the intention of really making a profit but instead is doing it for psychological reasons. Everyone says that they want to make money but I have come to find that not everyone really does want to make a profit investing in the stock market. Some people invest because they like to gamble, they want to make their friends happy, they like the company they buy personally, or it makes them feel more powerful for some odd reason. This gets me to the point of common investing mistakes that both amateur and professional investors alike continue to make.The first most common mistake I see investors make is buying stocks simply because they are cheap. There is no such thing as a cheap stock based ONLY on the price alone. If a stock price is 50 dollars and it controls one thousand dollars worth of assets then that is a really good deal, but it isn't as good of a deal if there was another stock that was 100 dollars and that stock 100 dollar stock controlled 10 thousand dollars in assets. Of course this example would never happen in real life but the point is simply asking yourself how much actual value am I buying when I invest in this company? credit problems The next biggest mistakes investors make is relating a company to personal thinking and problems that are not based on economic sense or prediction at all. Sometimes people invest in companies simply because they like the company personally. Nothing could be a worse idea than to invest in a company based on the sheer fact that you personally like it. Other people may or may not like the company you like and the company management may be horrible at handling the money that comes in. Some people also invest based on silly chart patterns and volume which rarely work when they are used investing in the stock market. Warren Buffet and many other famous investors have stated many times that looking at chart patterns and volume leads to confusion and rarely profit. It is true that some traders have made money off technical chart patterns, but how many of them consistently make money, and how many rich short term traders do you actually know? If we can work around all the psychological impedance's that hold us back when we buy companies, we CAN make money for a safer happier future in the long run. It's all a simple matter of buying well run good businesses, and then holding onto them for their future economic value instead of making investing mistakes. retirement investing |