First-time investors: 5 worst mistakes they make

First-time investors: 5 worst mistakes they make

People all learn from their mistakes. Especially as a first-time investor, it’s difficult to invest the right stocks for the first time. Even if the experienced investors may make wrong decisions. Here listed 5 most common suggestions for first investors in the stock market.

  1. Buying price thought

Stock investors usually take the buying price as the standard for selling or holding. This is a basic error and the most common one for ordinary investors. Investors much more caring about the buying price will ignore changes in market trends and this may eventually lead to losses.

When you’re at several percents loss, investors all want to compensate it at a lower level. While it may be not helpful and lead to more loss instead. If the stock price goes down continuously, it means that it is worthless and not necessary to hold anymore.

  1. Prefer cheap stocks and being afraid of high-priced stocks

For first-time investors, most of them prefer only cheap stocks, few people dare to buy high-priced stocks. On the one hand, they are just timid and afraid of losing money. On the other hand, it may be that they don’t have enough budget for the high-priced stocks. They just want to take out a small amount for a try.

  1. The shares are too scattered

You may think this strategy can spread risks on different stocks seemingly. But for ordinary small and medium investors, it is actually a kind of extremely decentralized behavior. The real successful investors choose only one or two good stocks that have huge potential, rather than a dozen or more stocks that can earn tiny profits. changing decisions temporarily during the session is also a very reckless and unprofessional action.

  1. Hope for big money in the shortest time without efforts

This idea of getting rich overnight is very common in most of the first-time investors. You may find that: the fast you want to be lucrative, the more money you lose. Many investors enter the securities market because of this thinking, and get out of the market with miserable loss.

  1. Leave the market with small returns, while holding dead stocks

This is the most fundamental cause of the ultimate loss for most investors. If you cannot change your thinking, you will definitely fail in the securities market. Even some investors with decades of experience still have such errors. This action shows a  lack of deep understanding and analysis of individual stocks, and a lack of systematic trading strategies.

It is easy to buy stocks at an appropriate time, but knowing when to sell requires expert knowledge. That means when to sell is also an important part of investment success. To be a professional investor, you must get to know the knowledge of “when to sell” and ”how much to sell”.

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Michael Aniston

Michael started with a master's degree in finance before he went into technology and coding. He is now a freelance journalist and video producer living in Berlin, Germany. When he doesn't write, he will travel many countries.