What do you think are the common mistakes that most investors make? One important thing I know is that, investing all their funds in a single asset and not using diversification. If they lose one, they lose all.
trading or investing? this applies to both, but more so with investors......pros are usually buying when retail is usually selling and vice versa. its elated to 'buying strength and selling weakness'....and related to buying rumors and selling news. however, on the most basic level of strategy and execution, the most common mistake, imo, is that a buyer fails to consider whether other buyers (with enough money) will come in AFTER him and be willing to buy at subsequently higher prices to keep price moving in their direction.......and if you're getting short the mistake is not considering whether others with size wiil be willing to sell at lower prices AFTER you do.
This is actually the opposite of the truth. Most noobs buy low and hope to sell at breakeven . . . Everybody is a born contrarian.
Most investors are poor planners. They donât have any goals. They have no clue how to allocate or diversify their assets or define what kinds of risks they are taking on. Then when they do make decisions they are bad judges of market timing.
Trusting experts. Expert mutual fund heads consistently fail to beat the market. Buy a system from an "expert" and watch it fizzle. Expert economists have no idea how to prevent a recession or get us out of one. The real experts, the ones that make money year after year, aren't talking. Or if they do, it's in riddles. You have to gleen what you can from the tidbits that slip out, and learn to seperate the noise from the signal in everything else.
1) Not having a plan (e.g. - to add incrementally and rebalance regularly) 2) Not being truly diversified (stocks and bonds are not the only asset classes) 3) knee-jerk reacting to market gyrations (i.e. .... selling at panic lows, buying bubble tops)