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Top 4 Mistakes a Stock Investor can Make

Mistake 1: Speculation


Speculation is pretty common in the stock markets. Stocks, currencies, and etc. are based on the past, present, and expected values. True investors can’t fully be sure of the future value of investments, unless they invest in financial products like bonds. However, the type of speculation I like is linked to trading based products on future events that are not promised.

Mistake 2: Market Timing


Market timing is almost impossible to follow through. Since financial markets are determined by financial performance, external events, but also buy how a human acts, it is impossible to know when markets willl crash. Trying to predict the movement of stocks and markets will most likely cause an investor to make an investing mistake.

Mistake 3: Day Trading


Day trading is the intense version of market timing. Some stock traders will do things such as buy and sell stocks, currencies, etc. all in the same day. This purpose is to generate their profits through a majority of transactions on a daily basis. Day trading is often driven by technical analysis's. Which is the analysis of stock charts. Day traders will find the information they need to buy or sell a stock from the charts. A downside of doing this is that investors will have to spend a lot of their time following the markets to complete their transactions at a the proper moment. Another thing is that every transaction has a coat to it, buying or selling. Also if you don’t invest in a tax-free savings account, every time you make a transaction with a gain you will have to pay taxes. I would have to recommend last-time investors to focus on the fundamental analysis of companies in which they plan to invest their money over a long period of time.

Mistake 4: Overpaying


Overpaying for financial assets will affect the overall performance of your investments. Stock prices are driven by a lot of factors such as speculation or past or expected profits. The intelligent investors will invest on companies for which they are paying a fair price.


7 comments:

  1. Hello, I agree with everything in this article, good job! Indeed the speculation is not good, but also not to work randomly. So about the day trading, if I buy and sell for a higher price in the same day, is not good enough?
    Of course there is a lot to learn over here, cheers to all the beginners and good luck!

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    1. You can always buy and sell at a higher price in the same day. You just need to make sure you figure in trading commissions and PDT day trading rules.

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  2. Indeed, the overpaying mistake I think is the most related to scammers, but at the end, nothing like a good research to be sure of your choices, am I right? Great article, someone starting in this business should step by this website, good job.

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  3. I have a bad habit of speculating about stocks. It's lost me some money in the past. I just love to think of the what-ifs and then follow my gut, even though most of the time it is wrong.

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  4. Simple and valuable information, I appreciate you guys are always so honest about everything! As I understand, you don't always need to pay taxes, is that right? In the day trading i mean, will depend over the value and time, correct? thank you!

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  5. This is so accurate! I could not have put that better myself! I hate people who speculate to create an advantage! Nothing better like a good and extended research to have our minds clear!

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  6. Well day trading is not exactly a mistake right? just a high risk style of investment that should be done by experts. It definitely has a lot of advantages, as disadvantages, but some people is completely worth it so! But indeed, as a beginners, doing this could be a huge mistake! Good article!

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