Committing mistakes is a part of life, and is an essential part of our progress. However, certain mistakes are too costly to be a part of your learning process. Especially in investment, where you’re talking about your money, you can’t have too many mistakes in your portfolio.
Here are some of them so you can avoid them in the future.
1. Confirmation bias
You may believe certain things about market conditions and research for information to support those beliefs. This is dangerous as you might be ignoring other information that could be valuable in your decision making.
Times are changing faster than ever before, not only in technology but investment as well. You may fall victim of “anchoring” where you become fixated on past information and then use that information to make investment decisions.
3. Herd mentality
People like to “belong.” It’s in our DNA. This desire could motivate you to pursue an investment just because it’s the trend and everybody’s doing it. Study and weigh the investment carefully before committing.
Hi there, Steve Sorensen here. I’m a certified public accountant and business writer from Colorado. I have a strong background in business and finance. I also offer advice to companies on clamping down on employee embezzlement. Visit my blog to know more.