Stock is a type of investment that is high risk and high return. The scale of risk comparison for both losses and profits is not much different. In addition, the tendency of shares to rising and fall can no longer change in a matter of days or even in a matter of hours. However, the temptation to lure the benefits that can be given in playing stocks, sometimes making people less careful and ultimately fail in investing in stocks. For those of you who want to start a stock investment, it’s good to learn from the mistakes of previous investors. Additionally, if you also worry about frauds, we suggest you consult with some of the trusted investment fraud attorneys.
Here are some big mistakes of stock investors that you need to avoid:
Only fix on one share
Only fixing on one stock is very dangerous because it makes investors not rational in valuing shares. When an investor has fallen in love with a stock, he also tends to ignore the bad things about his favorite shares, just want to hear only good things (confirmation bias). Use stocks as a medium or tool that can lead you to your financial goals, but don’t be too fixated on them because in the end you will still be released to meet your financial goals.
Don’t Understand the Fundamental Side
The company’s fundamentals should be a fundamental analysis in making the decision to buy a stock. Unfortunately, many investors prefer to see trends for a moment in technical analysis. The desire to make quick profits on the capital market, making stock investors tend to ignore the company’s fundamentals. Whereas the profit and loss of a company that triggers the share price depend very much on the company’s fundamentals. You can imagine the risks that threaten investors if the fundamental side is ignored.
Easy to despair
Owning shares means owning a small percentage of a business. Stock investment can also be analogous to doing business. You also need to be prepared with the risks involved, one of them is uncertainty. That is, you must be prepared not only when you get a profit, but also to be prepared for the risk of loss. A successful entrepreneur must have experienced ups and downs in running his business, as well as stock investors.