Legendary investor Warren Buffett once said “You do not have to do many things right in life to be successful, as long as you do not do a lot of things wrong.”
This applies not only to life but also to the stock & cryptocurrency market.
Let me start with, Making money, means to NOT lose money; most investors will lose money by making the ‘traditional’ mistakes.
If you want to be a successful investor, and turn profits, start by avoiding these mistakes.
Below you will find a list of the things which successful investors NEVER do. You can learn it from your own experience…’The Hard way’ … Or you can take this serious by reading this post carefully.
From today, once you have read this post, you are no longer allowed to make any of these mistakes:
1. Investing w/o a plan!. That bares repeating.
PLANNED INVESTMENTS are SMART INVESTMENTS
Anyone who just does something in the stock & crypto markets, can and will at least once, manage to produce a profit, of sorts. But without a plan, or without objectives, or a Goal. Their fate will strike sooner or later, & when this happens:
It’s game-over. Therefore, it is important that you invest in stocks & cryptos that best suit you, Invest in something that you believe in.
2. Going all-in on 1 investment & not diversifying, is a death wish.
Yes, Having 1 good investment can bring you to ‘Rich heaven’ and make you very wealthy.
But 1 bad investment will ruin you and make you poor.
Successful investors diversify; NEVER put all your eggs in the same basket. Diversification spreads and minimizes risk. In the long term that makes investing much more comfortable, which means you stick to your plan longer.
3. Getting confused and emotional by the market, is a BIG NO-NO.
The markets are going up, Then they go down, that’s a fact. When it goes down, this should not confuse or influence you. Corrections are normal to maintain a healthy upward trend. Those who sell in panic often have regrets.
4. Ignoring the risk of an investment is just dumb.
Risk is not how much money you can make if your position does what’s expected. No the risk is how much money you can lose if it goes wrong. You must never ignore the risk and you should know how much the potential ROI is compared to the level of risk you take. The main reason investors throw in the towel and quit, is because the losses are higher than they calculated. They can’t handle the drops so they get emotional, and panic-sell for a loss.
5. Count on a miracle to happen.
Miracles and hope are the worst indicators on the markets. Lesson be, Do not set unrealistic, goals, high profit expectations. You have to start with a low return; it is easier to adjust your expectations when it yields more than expected than vice versa.
6. Being deceived by the media. LMFAO. When is the last time the media steered you right. .?
Successful investors do their homework. They know what they are doing. Never get fooled by messages in the media. When something comes in the mainstream media, the opposite is often the true case. The mainstream media picks up a story only when the worst has often past us…
For example, when the media screams about Bitcoin breaking records; One should be shorting/selling. When the media is screaming that Bitcoin is crashing; One should be buying.
7. Paying too much (buying high, over valued)
Many investors look at the story around a company/cryptocurrency and not at the True valuation. A good company can become a bad investment if you pay too much/at its peak. A bad company can become a good investment if you pay very little/ in the dips. Timing and proper charting techniques play key roles in this.
The price is what you pay. The TRUE value is what you get!
8. Pay too high cost (fees)
There are always costs, fees associated with any investment. These fees make a huge difference on your actual ROI.
Every EURO/USD you pay in fees is a EURO/USD that cannot earn you moneys.
Let’s Suppose that person A and B both invest $10,000 over a period of 50 years with an annual yield of 8.5%.
Person A pays 0.25% costs per year, and Person B pays 2%.
The difference between does not seem substantial. But over time a little turns into a lot. So in this example, By the end of the 50 year period,
Person A earns more than $6 million.
While Person B gets just under $3 million!
9. Preferring cheap investments over good investments
Appreciation is, as said, very important. But appreciation is not always everything. Some companies and cryptos are cheap for a reason and will always remain ‘cheap’. The investments that make the most money are investments in good quality companies and cryptos. The holy grail is to find these early when they are still cheap!
A lot of new cryptocurrency-investors prefer to buy cheap “shitcoins” (most of the time priced under $1) instead of good coins with higher value and better projects attached. This is because they think the shitcoins will grow exponentially, but these cryptocurrencies are often very bad investments and they will only grow if the total market is growing. I’m not saying you will not make profit buying shitcoins but these investments are way riskiest.
What mistakes have you made as an investor?
We are all humans and humans make mistakes, but it is important we learn from them and improve our way of thinking. I hope this post gave you good insight on how to invest successfully. Hopefully in the future, you will NEVER make any of the aforementioned mistakes again! Never 4get rule #1, which is, Never invest that which you can’t afford to lose. !
You have been warned, be careful when investing and think before you act.
I wish you all the best and a lot of future profits!
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