The BIGGEST Mistake in Investing and How to Avoid

Anyone who enters the world of investing, be it any asset class, wants to know what is the biggest mistake and how can they avoid it. So let me share something that anyone can validate from the lives and success of the biggest names in the investing world- do NOT be afraid to make mistakes and embrace making mistakes!

That may sound like a strange answer as making mistakes can cost time, money and a lot of stress but that is unavoidable if we are entering the world of investing with its deep mysteries and complexities.

The biggest mistake if there is any, would probably be one of these:

1. Making decisions based on emotions, investing when emotions are high.
2. Being afraid to make mistakes, not the drastic ones but even any mistake, leads to inaction.
3. Not learning from mistakes made, repeating the same mistakes again.
4. Trying to find the perfect strategy and being right on all decisions is something that none has ever been to accomplish. It’s a lifetime of learning and even the most seasoned investor has grown over time by making mistakes and moving on!
5. The important thing to remember in investing is that it’s so dynamic that we cannot say all the decisions we make will work out just right.
6. Risk management is the key and avoiding a mistake that can be too drastic is the only point one must keep in mind. What kind of mistakes can be drastic and from which do people never ever recover?

Some examples.

• Getting into debt to invest, overextending yourself
• Investing without developing some knowledge or skills
• Getting into day trading/leverage trading and burning out money
• Investing is about developing patience, which always takes time and gathering experience.
• Ask those who have experience, and they will tell you how many times they have made mistakes, failed but learnt and moved on.
• The ones who have never made it, either never risked making mistakes, or just made too many of them (which is never learnt from the previous ones).
• Never be afraid to fall, but be afraid not to get up success is always built on any field with the same principles and this is one of the most important ones, even for investing.