Recent Posts

Seeking a better rate of return on investments? Avoid the following mistakes to achieve optimal results.

Assimilating gambling to investing. Gambling and investing are two different things. Gambling is playing a game, taking a chance or risk to achieve the desired result. Investing is putting capital into something, hoping to gain profit from that venture.

Assuming markets are efficient. Finding investments is not an easy feat. But with ample research and good discernment, an individual can pick the best investments and use those to his perusal.

Forgetting risk and return are correlated. Normally, a huge investment entails a huge risk. Same thing with smaller ones. When looking for an investment, check its risk profile and the amount of money you can lose if a trade goes wrong. Just remember to not invest more than what you can afford to lose.

Ignoring the details about a prospective investment. Due diligence helps investors understand a certain investment and how it can help bolster the returns. For instance, if investing in stocks, look into the company, as well as its financial statements and business plans.

Investing with no time horizon. Different financial goals. Different timetables. If you are investing for your child’s education, a long-term investment is what you need. Investing entails setting a timetable and you have to search investments suitable to your goals and time horizons.

Losing sight on risk tolerance. Or your capability to assume risk. If you are someone who cannot contend with market volatility and the ups and downs in the stock market, it is better to invest in a well-known company’s blue-chip stock than in a startup entity’s stock.

Overlooking taxes before investing. Although taxable, you can claim a tax break on some investments. It is important to consider your return after taxes, tax bracket, and your time horizon.

Paying too much for the whistle. A trader should not pay too much for trading and brokerage fees. One can save money on broker fees by maintaining your investment and not trading repeatedly. Look for a broker which does not levy too costly fees to make the most of your investment.

Purchasing low-cost investment. Not all bargain investments are worth the penny. A low-priced stock may look appealing on the outside but terrible on the inside. An expensive stock, on the other hand, may provide a good value, depending on the underlying factors.

Another thing (and the most significant one): never put all your eggs in one basket. Diversify those investments to maximize returns and minimize losses, as well as protect them against extreme movements and market volatility.