Beware of these five investment mistakes

Beware of these five investment mistakes

As you know, the investment ISNA € ™ t be so easy, chimpanzees can do it. If you are picking stocks in the same way Lusha, you most likely will lose money. In order to avoid the loss of the stock market, we should be aware of the error, to spend our money now and in the future.

Investment Mistake # 1: Failure to hold

There are two main types of players in the investment market: investors and traders. Long-term investors in the money stock. Traders buy and sell frequently. Some traders hold positions only a few minutes or even seconds, but most hold a few days, weeks, or even months of investment.

From a statistical perspective, the transaction is the most losing proposition. One study showed that 89% of professional traders lost over five year period, with an average of 4.5%. And what about the transaction ordinary investors do? Here € ™ s more, why they may not make money in the stock market. If you try to trade around the pros and cons of investing in short-term changes, who often lose money, so how do you think that amateur traders would do this?

Widely known as the world € ™ best investor, Warren Buffett, and asked how long he plans to hold some of his investments. His answer was, "œforeverâ €?. You can not always keep your investment, but statistics show that the longer you stay invested, the more likely you are to make money and if you're still alive, in 1950 investment in a dollar index funds, today you will have about 6.25.

Many amateur investors start investing in an attempt to take advantage of short-term gains, but the statistics show that the majority will eventually lose money this way.

You can do better than dart throwing monkeys do?

Investment Mistake # 2: Not diversification

Just make sure all of your diversified investment arena € ™ t put eggs in one basket. Different stocks department from 2007 to 2010 statistics shows us why. If you put all of your investment funds into the industrial metals sector (like Alcoa) of that time, you will make an impressive 35 percent, but if you already in financial services (banking companies such as America ), then you have lost 9%.

Savvy investors want to try and predict the absence of a department that will do the best, diversified investors can obtain the average return of the winners and losers. Investment professionals recommend that we hold stocks or ETFs invest in at least five different departments. Learn more ETF's investment here.

Investment Mistake # 3: Failure to capture the dividend

Remember that $ 625, your $ 1 Investment? 44% is the result of the payment of dividends. Dividend is simply your stock holdings, as you receive interest payments from the bank. Dividends paid per share is often four times a year. From 0% to 10% or more per year paid by shareholders holding their shares.

There are some drawbacks dividends. First, companies often pay dividends to establish and Donna € ™ t experience massive price gains. Second, companies can reduce or eliminate their dividends at any time.

Although it is not required in your portfolio each stock to pay dividends, which is the easiest and safest way to make money in the stock market.

Investment Mistake # 4: Doing so will stop

A stop is to sell the stock if the price drops to a certain level. Many stock portfolio depreciated quite a bit in the 2008 stock market crash, because investors do not € ™ t stay still. You can place an order and tell you to sell your stock if it falls on a certain amount of stock brokers. Stop power is the maximum amount that you decide you're willing to lose.

Although the amount of investment professionals to stop different, many people think that a stop at 7% or less stockâ current price is optimal. This means that if the current value of investments decreased by 7%, it will automatically be sold.

Better option is to use a stop. This means that, as the value of your investment increases, stop the amount will go up. If you have 1% of the value of investment income, cease to be a new low price 7%.

If you do not know how to place stop-loss orders, ask your broker for help.

Investment Mistake # 5: Do not study

Professional stock investors, many of the most popular investment services creators and popular investment books of Jim Cramer () Investors are advised to spend one hour per person per week inventory, the latest research and stay up any news related to the stock evaluation.

Although the long-held stocks is the best way to make money, there are times when you decide the conditions under which, in the stock investment can be changed. Manage change, scandal, the loss of dividends or cause changes in the industry may lead you decide to sell the stock.