Stock Investing Don’ts: learning from others’ mistakes

Stock investing is a good thing: you get a say in a company you believe is bound to success. You earn dividends from the company’s earnings. You sell a part of your share when the price goes high, and so on and so forth. So, you could assume it’s a pretty advantageous way to invest your money with the expectation to get profitable returns. But if you are a rookie in this just wanting to start out, there are a few things to should keep an eye on. Stock investing is an interesting sphere. You have to have, what’s best called, a special sense of feeling when to make certain actions. If the prices go up, down, or somewhere unknown, or if you are hyped about investing all of your money in one place, there are a few DON’Ts you will have to know about in order to eliminate risks and invest smart.

DON’T N1: Do not make emotional investments

Emotions are not acceptable in this tricky world of stock investments. I mean, if you love investing, that’s a good thing, means you are enjoying the process. But, do not let your emotions have control over your investment decisions. Under all circumstances you have to remember to take a “sober look” at the situation and remain rational. Do not panic and withdraw your money right away when you see the stock market going down the road, like many people did during the Great Recession back in 2008. Do not give in to emotional outburst of anger or fear to keep you from taking a step up into a bigger opportunity. In a similar manner, do not get too attached to the ownership of a share to the point of not willing to sell it when it needs to be sold. The examples are numerous, the moral is one: stock market is a place where emotions should not be allowed. All of your actions and decisions should be made solely based on research, data and your senses, which are way rational than your emotional feelings towards a certain asset or share.

DON’T N2: Do not overinvest. Just. Don’t.

Investing in stock market is a good place to put your money in. However, you should do it wisely, because too much of everything can harm. Investing all your money once and for all is not the smartest decision ever. You should be able to invest some at a time. Everyone knows that in stock market you should buy shares when they cost low and sell them when they reach their peak. Investing all of your hard-earned money at once will defeat the purpose of investing and trading wisely. So, make sure you make the investments periodically in order to make the most profit out of it. If you are struggling with how to start investing in stocks, investment newsletters are a great place to start with. They will guide you through your first steps into a successful investing pro who reaps returns like no other.

DON’T N3: Do not try to put the stock market into time frames, you’ll fail

Don’t get me wrong, you can, in fact, make good assumptions and predictions about when the market is more likely to hit the downroad or the opposite. But do not try to underestimate the abilities of the market to surprise you and hit you right back. Putting time limits and frames on how the market will perform in a month can be done only based on years’ of experience topping with good research, valid data and understanding of the spectrum in the first place. But other than that, you shouldn’t be timing the stock market, it will find a way to make you pay for it, literally.

DON’T N4: Conformity is not a smart thing in stock investing

You know there are people with no guts of their own, willing to make money  through stock investing without actually having their own ideas, motives, understanding and readiness to, actually, invest. Believe it or not, but people do lose their “individuality”, as investors, while trying to follow the crowd when the market is at its worst or the opposite. 2008 is a great evidence to that. Funny thing is, no one knows how and when the market will perform as expected, so conforming to the decisions of a few investors is not a good idea. Investing in the stock market is an individual thing as well. One might get away with investing all of his money into one company, whereas you might lose a big portion of yours if you went with the ‘all or nothing’ motto. Do your own research and study, collect your own data and, most importantly, make your own decisions while investing.
Do not rush the stock market and do not expect it to fulfill your expectations, because it won’t, and that is, frankly, the intriguing character of stock investing.

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