Deciding to invest is a step not everyone is willing to take, and rightfully so. Without equipped knowledge, it could mean a financial disaster for you. Success rarely happens overnight, even in the stock market. So, we should accept that until that day happens, we’re still average people, and even then, we still shouldn’t have our head in the clouds. Here are some poor investing traits some investors might possess that hinders them from success.
Not Personalizing Everything
I think this one applies to everyone, not just investors. When we try out something and it miraculously works, we take all the credit for it. If we do it and it turns out a total failure, we blame external forces for the failure and don’t accept our role in the failure. It’s an issue about ego, really. As an investor, you should start accepting that nothing in the stock market is ever certain and just hope for the best. There will be decisions you make that will work out, and there will be some that won’t, and that’s normal feature in an industry like that.
Not Expecting The Unexpected
Markets are risky because they’re very volatile. Because of this, it shouldn’t come as a surprise when the market crashes. Of course, nobody knows exactly when that will happen, but it’s something that cannot be avoided. As an investor, you should be well acquainted with the fact that investing won’t be a smooth sail. There will be crashes and booms, but that’s normal. If you have the stomach to stick it out, then this is the perfect industry for you.
The Past Equates To The Present
If there’s one fact that holds true to this day as it did decades ago, it’s that markets are volatile. But, frankly speaking, just because you’ve been in the stock market long enough to see some changes, doesn’t mean you’re fully equipped with the experience to deal with the stock market now. Factors that affected a change in the market decades ago will be different the next time around. Even the time for when the next historical thing happens is uncertain. Experience can be useful, but it shouldn’t blind you from identifying situations that will never repeat itself.
Failing To Determine Your Risk Tolerance
Before making any huge moves, you must first determine how much risk you’re willing to take or else you might put yourself in deep financial trouble. For me, that is the most important thing to do before you start making any moves in the market. A lot of investors don’t bother in figuring out their risk tolerance and the trouble that comes with going past that tolerance. You won’t only be putting yourself in financial trouble, you’ll also likely face psychological trauma when things go awry.