Anyone who is new to investing is almost certain to make a few mistakes throughout their investment journey. Join us this week as we look at some of the main ones to look out for, and what you can do to avoid them:
Not Starting Early Enough
Many think that having perfect timing is the key to investing but in reality, spending more time being invested is possibly just as important.Host Andrew Baxter suggests for anyone who is thinking about investing to simply get started. Many people will wait for all of the stars to align and for everything in their life to be sorted out before taking the leap to get started in their investing. It’s unlikely that everything in your life will ever be perfectly aligned for you to get started so you may just need to rise above the situation and jump in the deep end. It can even start with just a single action step which takes you closer to your goal while every passing day that you do nothing, your goal is getting further away from you.
Not Getting Educated
A common mistake comes from when someone getting started in investing may think they know a bit more than they do. Host Andrew Baxter explains that the best money you’ll ever spend is on educating yourself. Knowing what to do and when to do it is important and you can only learn things like this before getting started if you get educated on the topic through the proper channels. Proper education can also alert you to potential landmines in the investment space you’re wading into and equip you to protect yourself against the potential risks. Learning from the mistakes of others ahead of time is a great way to prevent the same thing from happening to you. Overall, if you’re just getting started in the investment space, getting educated should be right near the top of your list of things to do before jumping in the deep end.
Not Having a Gameplan
Before undertaking anything, it makes sense to want to know where you are aiming to get to. Host Andrew Baxter explains that simply jumping in and going with the flow is not an effective plan for reaching your investment goals. Stopping and thinking about your game plan is vital for actually navigating through your investment journey to reach the point where you achieve what you initially set out to achieve. Once again, having a solid game plan in place can protect you from any potential obstacles that you may encounter along the way, once again allowing you to learn from the mistakes of others.
Being Too One-Eyed
Everyone has preferences in life and the investing space is no different. For a number of reasons, investors may be totally fixated on one asset class or investment type that they fail to recognise opportunities in other areas that they may stumble into. Host Andrew Baxter points out that this can even come down to your family or the people around you who can certainly influence what path you take as you get into investing. Diversification is one of the main ways you can reduce risk in your investments as it allows you to have exposure in different areas. This way, if one of your investments goes south, at least you have money parked in other areas to offset the risks of the potential losses in different investments.
No Money Maintenance Plan
Although taking action to start your investment journey and continue to make money are important, it’s critical to have a money maintenance plan in place. There are things you need to do regularly which may not be the most glamorous or exciting tasks but simply need to be done in order to keep you on track with your money and investments. Taking the time at regular intervals to consider things like refinancing on loans, reviewing your insurance and whether the premiums are worth what you’re spending. Spending the time every now and then to make sure you’re on track is invaluable as it gives you the insights you might need to correct your path should you find yourself heading in the wrong direction.