The 9 mistakes we have shared on this blog may seem simple but they can cause a snowball effect if we assumed them. We are told smart people do not have to go through a mistake themselves if they can avoid it. Learning from mistakes of others can help us navigate through investment process however it’s never too late to rise up from our own and make the right choice.
- Waiting too long to start investing: Most people procrastinate when it comes to investing. They always feel they are not ready to invest yet until they have a big chunk of money to feel ready. Beginning as early as possible is a factor that you find in most successful investors as they have learnt the effect of time to compounding interest.
- Falling for Greed or Hearsay: – Many established investors do not conform to a herd mentality. People will run to the bank after hearing how certain business is a hit or stocks or virtual coins are doing great and without prior understanding of the sustainability of the venture they dive in. This causes bubbles in the market and they start counting losses. We teach on the emotions that drive the market which is greed and Fear and a good investor is the one who is not subjected to either but thinks objectively of the investment opportunity and undertake it with confidence.
- Timing the Market: This happens mostly because the investor wants to invest for a short period for only speculative motives. They therefore are looking for the time the prices rises and sell immediately without considering long-term greater value of the same. They may end up panicking when the market drops and may sell at a loss. Again buys high price than sale. They therefore end up selling low and buying high which is the opposite of the goal of investing.
- Investing not to Lose: When investors get into investment with a game mentality of not losing, the opposite happens. Speculation comes in play instead of studying the market with the intention to get as much value as possible in their investment. When you invest not to lose, you use a defence mechanism kind of a strategy and panic when the market hits a dip and end up withdrawing from the market at a loss.
- Investing without a plan: They say when we don’t have a plan, we are simply planning to fail. When we invest because a friend recommended us to even if they themselves do not understand much of the market, we are set for a fail. It’s always good to have a purpose for your investment. As an investment company, we believe our mandate is transformation, and transformation begins from instilling good values, investing the good values to the society in service which now translates into economic progress. We have TRANSORMATION at the fore front of any investments we undertake.
- Buying on hope: Not doing enough research: This happens when one invests on cheap investments with the hope it will bring them returns. Buying on home cannot work well in business and investment as research on the company, the value and sustainability of the venture is as important.
- Not understanding your investment: Most investors get complacent after doing their investment. They stop learning the dynamics of the market or follow the developments in the market which they can leverage on so as to gain as much value as possible.
- Unwanted loans: Unwanted loans happens also when one strives to live beyond their means and so end up having more of these unwanted loans. There are good and bad debts. Good debts can be used as a leverage to more value of the initial capital when investing in a venture with a 100% guarantee of making greater value above and beyond what has been invested. Bad debts on the other hand is used for consumption where no value addition is expected or even unplanned for thus causing losses.
- Not teaching our children on financial Literacy: We live in a society where we teach our children about manners and good habits but not financial education. We shy away from money topics mostly because we probably didn’t get educated about it growing up either. It’s time we changed this narrative by learning financial literacy if we have yet to because as soon as we learn we realize the mistakes we have made was because of what we did not know or the poor unsupportive beliefs we grew up believing. We will then teach the same to our children and have the rest of the generations on a good financial ground.
We are passionate about Financial Literacy at Gold Avenue Africa: Gold Finance Academy. Get in touch with us to join our Aug Class of Investors on 0714985009
Wow , highly educative
Every Kenyan ought to have this information and most of all put it into use
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