Investing is not a matter that should be taken lightly. You have worked by the sweat of your brow for your hard earned money, and it’s time to make it grow. It requires you to weigh the risks so that you can reap the rewards. The market can be most profitable for you if you know what you’re doing.
You can’t expect returns without proper planning and understanding of the financial matters. Here are the most common mistakes you should avoid when making an investment.
Lack of a Clear Investment Goal: An investor must determine what they want from their investment and the duration of how long they want to hold it. Is the investment for your retirement? For a vacation, you plan on taking next year? Or for your child’s education? You should have a clear goal in mind when making an investment.
Attempting to Time the Market: Many investors try to time their entry and exit from the market. They make these decisions based on the news cycle. Instead of trying to keep time they should just regularly invest as it’s the best thing to do. The length of time in the market does better than trying to time it.
Selecting investments with no track record: When choosing an investment, choose one with a track record. Don’t buy into the hype of the newest investment in the marketplace. Look at the performance history of the investment option. You should analyze how the option has performed in the past three, five, ten years or more.
Being too conservative or aggressive with your investment: Some investors switch to a very conservative portfolio when they reach the age of fifty. There are also those investors who have started investing late in life and invest too aggressively to make up for lost time. You must have a balanced approach to your investment and calculate the risk so that your investment is rewarding.
Not seeking financial advice: Many investors either don’t have the time or the understanding to invest in the marketplace. Investing without financial help is a big mistake. Seek out a financial advisor who fits your philosophy of investing and understands your goals.
To avoid these common pitfalls when making an investment, reach out to Richard Van Scheltinga, a wealth advisor in Toronto, ON. Click here to visit his website.