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Thread: Mistakes of the average investor

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  1. #1
    Hi all,

    What do you feel are the most common mistakes of the average investor?

    I'll share a couple which are very common in my opinion:

    1. Tends to become grossly overconfident
    2. Trades too much at great cost

    Looking forwared to reading your replies.

  2. #2
    I think one of the great mistakes is that investors become "married" to their stocks, or they treat them as children. They are not blood relatives -- it is OK to sell them. It is OK to dump them.

  3. #3
    Originally Posted by Alan Mendelson View Post
    I think one of the great mistakes is that investors become "married" to their stocks, or they treat them as children. They are not blood relatives -- it is OK to sell them. It is OK to dump them.
    Absolutely Alan. Luckily, when I "divorced" from my first investment in a company stock I actually made a profit. Today I prefer to invest in Index Funds.

  4. #4
    Here's another common mistake:

    To make irrational buy and sell decisions. To benefit from compount interest you need to stay the course and go for the long run.

  5. #5
    Originally Posted by buyingstocks View Post
    you need to stay the course and go for the long run.
    I disagree. There is no reason to hold on to an investment that is not performing or even failing. There is no reason not to sell when it's the time to sell.

  6. #6
    Originally Posted by Alan Mendelson View Post
    I disagree. There is no reason to hold on to an investment that is not performing or even failing. There is no reason not to sell when it's the time to sell.
    I see what you mean Alan. What I meant was to not overract to the mood of the market. It can go up and down and holding a long term position, the overall risk can be reduced. And the overall investment should be well-diversified.

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