Curated by: Business desk
Latest version: November 27, 2023, 1:24 PM IST
It is very important to make a logical decision while investing money.
Before investing money one needs to have deep knowledge about the market.
Investing money in the stock market has increased in India over the last few years. Due to better returns compared to other investment options, people prefer to invest their money here. Not everyone can make money from the stock market, as one needs to have a deep knowledge of the market before investing money. Many times people make several mistakes, which can prove to be a disaster and one can lose all their money.
American investor Benjamin Graham noted that any investor’s greatest strength can be their own personality. He believes that humans are emotional creatures and are not always rational. If investors invest money in the stock market and have some superstitions, they will definitely make mistakes and lose their money.
Here are 5 mistakes to avoid:
Being overconfident
Big Bull Rakesh Jhunjhunwala once said that market is king and no one can rule it. Sometimes, investors are confused that they have caught the trend of market movements. They get overconfident and make investment decisions based on it, which leads to them losing money.
Agrahana worthy mind – mentality
It is natural to want to follow the crowd when it comes to investing money. Herd mentality often leads to huge losses of money. Many people follow a stock and investors put their money into it, thinking it will make a profit. This herd mentality can create bubbles in the stock market. When this bubble bursts, it will also empty your pockets.
emotional decision
When it comes to money, it is crucial to make a logical, rational and calculated decision rather than an emotional one. A decision made on impulse will lead to bad consequences. Some retail investors make the same mistake and end up losing money and incurring losses. Before taking any decision, do a thorough investigation, research and then decide where you want to invest your money.
Seeking the opinions of others
Seeking the opinions of others is good because it gives you another perspective. It is better to rely on experts while investing in the stock market. Seeking opinions of others after investing in the stock market can cause harm and ultimately mislead you. Before making an investment, you can deliberate and discuss and then invest.
Sticking to a particular share
Many retail investors stick to single stocks, especially those that have given them good returns in the past. Even when stocks start falling, they don’t sell and wait for a long time. This can be quite a costly mistake. Always keep an eye on your portfolio shares and analyze them. Always remove the losing stocks and make sure to include the stocks that will bring you profit.
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