When it comes to investing, an investor should adopt a defensive approach, taking care that he is not hitting losers. Unlike offensive investing, which is more skewed towards playing it aggressively, a defensive investing lays emphasis on 'not doing things wrong'. In fact, if this approach is combined with a few offensive investing tactics, then an investor could take advantage of both the extremes. For example, an investor can choose to take more risk, but limit it to a specific percentage so as to be both open to returns and in the right way.
An investor faces a series of pitfalls during his investment tenure. Either he could be loaded with too much of an information, while at other times, the emotions of fear, ego, pride could be haunting him. For instance, at times an investor could have oversupply of capital that he eagerly invests in a number of assets, which otherwise are extremely risky leading to bad results. So, in a nutshell, an investor should be alert and open to accept the things happening around like the supply or demand of capital and his eagerness to invest it. Channeling emotional pressures wisely into making a sensible investment decisions is the ‘mantra’ to be skillful.