6 WAYS YOU SHOULD NEVER INVEST

Here’s some things you need to know to avoid the pitfalls many others face if you’ve ever

thought about investing.

1. Letting Emotions Run Wild

We’ve said before that the biggest killer of investment return is your emotions and it bears repeating. 

1. Letting Emotions Run Wild

Fear and greed rule the market, and the market is irrational. Do not let your emotions overtake you. 

1. Letting Emotions Run Wild

Focus on the bigger picture; your investment plan and goals. Rather than be ruled by your own emotions, use the irrational decisions of other investors to your advantage!

2. Investing in Something You Don’t Understand

One of the world’s most successful investors, Warren

Buffett, cautions against investing in businesses you

don’t understand. This means that you should not

be buying stock in companies if you don’t

understand their business models.

3. Falling in Love with a Company

Too often, when we see a company we’ve invested in do well, we love their products, what they’re doing, it’s easy to fall in love with it and forget WHY we bought their stock in the first place. 

3. Falling in Love with a Company

You bought this stock to make money. If anything

changes, it’s time to objectively reassess your investment and

even consider selling the stock.

4. Unrealistic Expectations

Slow and steady usually comes out on top – be it at the gym, in school or in your career. Why, then, do we expect it to be different with investing? 

4. Unrealistic Expectations

A slow, steady and disciplined approach will go a lot farther over the long term. This means you need to keep your expectations realistic in regard to the length, time and growth that each stock will encounter.

5. Attempting to Time the Market

Successfully timing the market is extremely difficult to do. Even institutional investors often fail to do it successfully. 

5. Attempting to Time the Market

In fact, one of our speakers, Marcus De Maria says, “It's

not about timing the market, it’s about time in the market.” Don’t try to

play the market like you do in a casino, it’s asking for

trouble and inviting unnecessary risk.

6. Failing to Diversify

While professional investors may be able to succeed by investing in a few concentrated positions, it’s not recommended for most

people. Stick to the principal of diversification. Do not allocate more than 5 to

10% to any one investment.

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