Common Mistakes People Make When Investing
Investing in financial markets is one of the quicker ways to build long-term wealth. Over time, your investment is likely to earn solid returns and beat inflation. However, not every investment idea is a good one, and if you aren’t paying attention to what you’re doing, your mistakes could prove costly. Know that successful investment is not merely about selecting the right stocks, but it’s where one must also avoid common errors that might undo all the hard work put in previously.
Well, nobody’s perfect, and it is natural to have our share of losses along with the wins, especially when it comes to investing. But some of the mistakes you are likely to make when trading stocks are actually pretty common. In fact, most of the successful investors that you see today are likely to have made many of these mistakes at some point in their investment journey.
So to avoid making ill-informed errors and help you make more informed decisions, Westgroup Financial Management Inc. has put together a list of the most common mistakes people make when investing and how to avoid them.
1. Waiting too long to invest and forgoing compound interest
Waiting for the “ideal” time to invest in the stock market just means sitting on the sidelines in the meantime. According to experts, you should invest whatever amount you can, whenever you can. If you don’t have a large chunk of money to invest, a dollar-cost averaging strategy works, too. If you want to accumulate wealth and make the most of the magic of compound interest, it’s critical to start early and be consistent. In addition to getting interested in your initial investment, you are accumulating interest on top of interest! As such, your wealth can grow exponentially through compound interest; it’s like putting your money to work for you.
2. Thinking stocks are too risky
Many people equate investing in stock to gambling. This causes many people to stay away from the stock market. Gambling simply takes money from a loser and gives it to a winner. No value is ever created, whereas through investing, the overall wealth of an economy increases. Often, investors consider shares to be simply a trading vehicle, and they forget that stock represents ownership. Investors are constantly trying to evaluate the profit that will be left over for shareholders in the stock market. This is why stock prices undergo fluctuation.
To avoid these and other mistakes, reach out to the experts at Westgroup Financial Management Inc. As experts in financial planning and specialize in finding the best solutions to meet your financial needs. We have built our business around integrity and honesty, focusing on changing your financial path for the better. Our passionate professional team is ever ready to help families and businesses succeed in their financial goals. They are highly committed to ensuring success through a calculated strategy.
We serve clients across South Surrey, White Rock, Delta, Vancouver, West Vancouver, North Vancouver, New Westminster, Coquitlam, Burnaby, Langley, Chilliwack, Port Coquitlam, Port Moody, Mission, Abbotsford, Pitt Meadows, Maple Ridge, Squamish, Whistler, Victoria, Nanaimo, Kelowna, Penticton and Kamloops, BC.