New Year brings with it renewed plans for the upcoming future, which may involve a change in investing. Everyone wishes to earn more and invest more than what they have been doing. In the process, investors can make certain common mistakes that are easily avoidable.
Here are listed some of the mistakes that will help one to sail to a smooth investing year while taking out the mistakes.
The habit of procrastination:
The most right thing to do is to ‘act’ on the thoughts. If an individual has planned to commit a certain sum towards investment, then he/she should make a move right at the moment without delving into further thoughts that lead to the postponement.
Too much in one asset:
If the investible surplus is Rs 10,000, then it’s not wise to put it in just one asset such as debt or equity. Rather focus should be on splitting the amount between various asset classes such as equity, debt or liquid funds.
Avoid quick money making tips:
Nothing comes easy and so is true for investing too. One cannot rely on quick money making tips to believe falsely that it will double their investment overnight. Investing needs time and patience from investors, who should remain calm even during volatile times.
Going overboard with diversification:
If an investor follows the systematic investment plan rigorously without bothering about the market noise can succeed to generate impressive returns over a period. But, if the same investor is trying to add new investments on the basis of news or recommendations without reviewing the existing portfolio then it can give rise to over-diversification, which is as counterproductive as under-diversification.
Too busy to review:
Looking back at the results of investing is as important as the commencement of investing. Though reviews cannot be done on a daily basis one must ensure that they keep a track of portfolio performance promptly or at least once in a year. Such periodic reviews can help to take corrective steps and plug any holes that might be leading to losses.