List of Investing Errors
Here is a list of common investing errors that investors tend to make:
- Not following an investment objective when you build a portfolio.
- Buying too many mutual funds.
- Not researching a one-product stock before you buy.
- Believing that you can pick market highs and lows (time the market).
- Taking profits early.
- Not cutting your losses.
- Buying the hottest {stock, mutual fund} from last year.
Here’s a recent quote that underscores the last item. When asked “What’s the biggest mistake individual investors make?” on Wall $treet Week, John Bogle, founder and senior chairman of Vanguard mutual funds, said “Extrapolating the trend” or buying the hot stock.
On a final note, get this quote on market timing:
In the 1980s if you were out of the market on the ten best trading days of the decade you missed one-third of the total return.
Article Credits:
Last-Revised: 2 Aug 1999
Contributed-By: Chris Lott, Thomas Price