In 2020, 56% of Americans were invested in the stock market. In addition, investing hype has grown as stocks like AMC and GameStop trend. As you begin your investing journey, read our top 4 mistakes to avoid.
Are you an aspiring investor? Most of us invest at some point, with Statista reporting 56% of Americans are invested in the stock market, to name just one country. In addition, hype around investing has grown in the past few years as apps like Robinhood gain popularity and stocks like AMC and GameStop (GME) trend.
Despite the hype, we recommend a calm and focused approach to investing your money that's less about trends and more about slow and steady progress. Here are four (4) investing mistakes to avoid as you begin your investment journey:
Mistake #1: Trying to mimic high-frequency traders.
According to Warren Buffett, you should buy stock in a good business and hang on to it for the long term. If you are trading too actively, you are probably paying too much in transaction costs.
Mistake #2: Paying too much in fees and expenses.
Be wary of management or brokerage fees associated with your investment. Make sure you don’t get stuck with fees that are above what you have to pay for your investment needs.
Mistake #3: Trying to time the market.
Trying to predict a market top is natural, but there just isn’t a definitive pattern in all of the history of the market. According to Warren Buffett, you are making a big mistake if you think you can predict the short-term movement of the stock market.
Mistake #4: Being too emotional.
Sometimes it pays to be like Spock, Star Trek's logical science officer. We recommend developing a strong-minded approach to investment and ensuring you don't get carried away with emotion. In short, successful investing requires emotional discipline.