In the course of the next few topics, we will show you a number of beginner investor mistakes that can be easily avoided.
Not having a defined purpose
Investing without a defined purpose is like driving on a road without a map, GPS, or signs to guide you.
You can keep going until you get somewhere, but without the proper coordinates there is no way to know which is the best way, what risks to avoid, and the main thing, where to go.
Not knowing your risk tolerance
One of the biggest mistakes made by beginner investors is not knowing their tolerance to risk, that is, their investor profile.
There are several categories of investments and financial products, each one being suitable for a different type of investor: conservative, moderate, or bold.
Not diversifying your investment
You have certainly heard the expression "you shouldn't put all your eggs in one basket", haven't you?
Well, in the investment world, having a diversified portfolio is practically one of the main commandments to have a promising journey.
However, many beginner investors make the mistake of betting everything on a single asset.
Not maintaining discipline
The investment world requires patience, caution, and a lot of discipline, but beginner investors often make the big mistake of destabilizing their investment portfolios in the very first months.
Investing based on tips or rumors
Investing capital in assets simply based on tips or rumors from third parties, without having any scientific, sociological or economic basis to support the argument, is the same as betting on luck.
Making decisions based on short-term volatility
Expecting quick results is one of the biggest villains affecting the profits of beginner investors.
This means that you should never make decisions based on short-term volatility, as this practice is synonymous with throwing money away.
Not having an emergency reserve
Without a doubt, one of the most serious mistakes made by beginner investors is to start making investments in the investment market without having an emergency reserve.
This mistake can jeopardize the security and continuity of your strategy.
“Herd Effect”
A mistake that is not restricted only to beginner investors, but is also made by individuals who already have a good level of experience with the financial market is the "Herd Effect".
In short, the "Herd Effect" is the natural human tendency to follow other people's actions, without even questioning the motivations behind that attitude.
How to avoid these mistakes?
To avoid the mistakes made by beginner investors it is very important to study a lot about how the investment market works, and to keep up to date with all the internal and external political and socioeconomic factors that affect the performance of stocks, currencies, government bonds, and other assets.
