The same investment, why some people earn while some lose? Actually, the main difference is their attitude and the process. According to the past investment experience, below is the summary of the main 5 common mistakes investor commit:
Mistake 1: When the market readjusts, people stop the investment or even surrender.
The value of the funds will not always grow steadily. There will be times when the prices falls, and that's the best time to test the determination of the investor.
Actually the best way to face the price fluctuation will be to understand the reason.
It will need our analysis, whether the market is suffering from any downfall or it’s just a short term fluctuation.
If we cannot predict the reason, but still have faith on the market, the more we should not stop the savings or even surrender.
Mistake 2: Having a short investment time frame and hope to make a profit in 6 months.
Investment into funds basically is a long term savings to reach one financial goal. So one should have to cultivate the "long-term investment" mindset.
Example, for the first half of the year for those investor who have entered the market at a higher price, they bound to face a loss in the capital. If they only hope to see the return in just 6 months, might as well "admit defeat" and surrender.
Actually, regular investing should be at least until a time frame of 7-11 years, mainly to practice dollar cost averaging, and to diversify the investment so as to neutralise the risk.
Mistake 3: Only invest in the best performance fund.
The history performance doesn't reflect the future performance. A lot of investor should have heard of this at least a dozen times already. But, people tend to overlook the real meaning of it.
As our local financial institute progress over the years, investor will notice that the ranking of the funds will have quite a big change.
A fund for regular savings is one which can hitch inflation, and overtake other similar funds for a long period of time. One which only have short term returns and become the "Best Performance" fund might not be the best choice for regular savings.
Mistake 4: Showing favouritism
Buying into just 1 fund is like putting all the eggs into just 1 basket. But then, diversify your risk also doesn't mean investing into different company funds.
Try thinking, if you buy the same type of funds from another company, we will be gambling with our own money, our own investment which doesn't make much difference.
We don’t encourage investor to overly invest into too many different funds, but if we really wish to achieve diversification, the investment should have a combination of a few different zone and different characteristics so as to achieve a diversification of the risk.
Mistake 5: Invested but didn't monitor.
Although investment into fund is a long term investment, what we have to remind people is that, it also doesn't mean that after we start investing, we can just ignore totally about it.
Changes in the financial trend, the changes in the market, the changes in the fund managers or the company, will also result in a downfall.
So one should also monitor the funds regularly, and do necessary changes depending on individual financial goals and risk appetite along the way.
Happy Investing! :)
Mistake 1: When the market readjusts, people stop the investment or even surrender.
The value of the funds will not always grow steadily. There will be times when the prices falls, and that's the best time to test the determination of the investor.
Actually the best way to face the price fluctuation will be to understand the reason.
It will need our analysis, whether the market is suffering from any downfall or it’s just a short term fluctuation.
If we cannot predict the reason, but still have faith on the market, the more we should not stop the savings or even surrender.
Mistake 2: Having a short investment time frame and hope to make a profit in 6 months.
Investment into funds basically is a long term savings to reach one financial goal. So one should have to cultivate the "long-term investment" mindset.
Example, for the first half of the year for those investor who have entered the market at a higher price, they bound to face a loss in the capital. If they only hope to see the return in just 6 months, might as well "admit defeat" and surrender.
Actually, regular investing should be at least until a time frame of 7-11 years, mainly to practice dollar cost averaging, and to diversify the investment so as to neutralise the risk.
Mistake 3: Only invest in the best performance fund.
The history performance doesn't reflect the future performance. A lot of investor should have heard of this at least a dozen times already. But, people tend to overlook the real meaning of it.
As our local financial institute progress over the years, investor will notice that the ranking of the funds will have quite a big change.
A fund for regular savings is one which can hitch inflation, and overtake other similar funds for a long period of time. One which only have short term returns and become the "Best Performance" fund might not be the best choice for regular savings.
Mistake 4: Showing favouritism
Buying into just 1 fund is like putting all the eggs into just 1 basket. But then, diversify your risk also doesn't mean investing into different company funds.
Try thinking, if you buy the same type of funds from another company, we will be gambling with our own money, our own investment which doesn't make much difference.
We don’t encourage investor to overly invest into too many different funds, but if we really wish to achieve diversification, the investment should have a combination of a few different zone and different characteristics so as to achieve a diversification of the risk.
Mistake 5: Invested but didn't monitor.
Although investment into fund is a long term investment, what we have to remind people is that, it also doesn't mean that after we start investing, we can just ignore totally about it.
Changes in the financial trend, the changes in the market, the changes in the fund managers or the company, will also result in a downfall.
So one should also monitor the funds regularly, and do necessary changes depending on individual financial goals and risk appetite along the way.
Happy Investing! :)
