No one gets it right every time when it comes to the unpredictable world of investing, but being aware of the common mistakes in the industry can help you make more informed decisions in the future.
We’ve pulled together five investing mistakes we often encounter, and how you can combat them as part of your strategy.
1. Taking advice from non-credible sources
With social media creating a growing platform of ‘finfluencers’, it’s harder than ever to know if what we’re being told is legitimate. It may help to do some digging on the backgrounds of the people that are sharing financial advice online, such as their education and credentials, before taking their word as gospel.
2. Watching the markets like a hawk
Once we’ve invested our hard-earned cash, it’s tempting to try and keep up with the continuously changing and at times volatile markets. Investing is a long game, so approaching the process with patience can help you avoid unnecessary stress. If you have any questions or concerns about the strategy you’ve implemented, get in touch with your financial adviser.
3. Not diversifying your portfolio
Putting all your eggs into one investment basket opens yourself up to the risk of that one asset impacting your entire portfolio if it performs poorly. Diversifying your portfolio by incorporating a variety of different asset types can help minimise this risk.
4. Investing without a solid plan or goals
As the old saying goes, if you fail to plan, you are planning to fail. Consider what you want to achieve with your money in line with your goals, and incorporate this into your plan to make sure your investment is working in your best interest. It may also help to research into the companies and products your money is invested with to ensure they align with your values.
4. Investing money that you’ll need in the near future
There is an element of risk in all investing with no guarantee on returns, so it’s important that the money you’re contributing is money you can afford to lose. For example, if you’re putting away your pennies for a house and know you’ll need access to those funds in the next year or two, it may be best to keep it in your savings account.
When it comes to investments, there are many aspects you need to consider, so undertaking your own research and consulting a financial adviser can be invaluable to your financial future.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.