10 Investment Mistakes You Should Avoid In 2015

Whether you’ve been doing it for years or you’re starting out, mistakes are bound to happen in investment business. There are common mistakes that investors makes often which you should always look out for and if you follow what feels good you will always end up doing the wrong thing.

Here are some of the investment mistakes you might want to avoid this year.

1. Making less than the market
Nobody sets out to have less than a good return on their investments but this happens to investors all the time. This is because investors buy and sell at the wrong time, instead of investing on emotion, understand how the market work and have a plan that you stick to.

2. Don’t buy something you don’t understand
To avoid mistakes in investing never forget one simple rule. If you don’t understand how a business works, then don’t be a part owner of it.

3. Not giving your strategy enough time to play out
Just because we live in an ADD world doesn’t mean you have to act that way in your investments because it can cost you a lot of money. In the end you will regret not giving your strategies enough time to play out. Instant gratification takes years to play out.

4. Don’t follow crowds
Don’t be tempted by what everyone is talking about, this is the worst time you can get involved. The madness of crowds often sends prices rocketing before the inevitable crash.

5. Going in blind without a plan
A lot of people start investing without a plan. It’s hard to drive decisions without process, it helps to work with an adviser or coach to help you determine the best strategy and stop making poor emotional decisions.

6. Steer clear of cash “tomorrow” stocks
It can be very tempting to see a company telling you apparent profits and boasting great growth forecasts. But you need to check whether those accounting figures actually represent real hard cash.

7. Chasing past performance
Most people spend time chasing past performance instead of looking for new opportunities. Avoid investing in the companies that were doing well last year because that’s where everyone is going, find something new.

8. Don’t spend your dividends
It’s easy to share price growth as our target and see dividends as a bonus bit of cash to spend as it comes in. But that can be a huge mistake if the 10year performance of some stocks is examined.

9. Ignoring your costs and fees
The amount you pay for investing varies from one place to another; most investors overlook those costs and focus solely on their returns. You can actually increase your return by 0.5% annually by cutting your overall costs by 0.5%.

10. Not balancing and diversifying holdings
One of the worst things you can do as an investor is have all of your holdings in one company, sector or asset class, that will almost guarantee if something goes wrong so will all your money. Abetter strategy is to diversify and reallocate when one area gets over weighted.