Here are the top 5 BIGGEST mistakes investors make.
1. Try to time the market
- As soon as investors buy, their very next question is “When should I sell?”. That’s the wrong question.
- The correct question is how much can I buy?
- Remember, it’s “time in the market” not “timing the market”.
2. Not buying frequently
- A lot of investors buy stocks in 1 month and then they wait 3 months, 6 months, 9 months, and sometimes over a year to buy their next stock. This is a mistake.
- You should try to invest 15% – 30% of your paycheck every month.
- If you can’t invest 15% – 30%, that’s okay. Start small and aim for 5% but try to increase that percentage over time.
3. Let emotions take over
- When the market goes down, investors can have the tendency to freak out and sell.
- This is exactly the opposite of what you should be doing. You should be stockpiling, or buying more. Stockpiling is the #1 way to build wealth in the stock market.
4. Follow the advice from Gurus on Youtube, Twitter, Reddit, TikTok, etc.
- Make sure you always double-check the stock in a software that cuts through human emotion and boils right down to logic.
- We use Tykr because Tykr analyzes up to 5 years of historical data on the financial statements to determine if a stock is On Sale, Watch, or Overpriced.
5. Own too many stocks
- You should try to own between 10 and 15 stocks. A focused portfolio that allows you to earn between 15% and 50% per year.
- If you own too many, you’re essentially creating an ETF, Index Fund, or Mutual Fund and the best returns you can make are 6% to 8%.
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