The stock market is always with up’s and down. However, looking at the present Global situation etc, you need to be very careful while planning to enter the stock market this year. You might be one of those who might be lured by the phenomenal returns from the market in the last four years. So, thinking of your past situations, you might feel tempted to double your money by rushing into the present market. However, I just want to caution you by asking you to be careful while stepping into the present stock market. You might enter into the market at higher level but chances of you losing capital might be great at the moment. Here are some of the common mistakes that you could avoid in order to prevent losses:
- Don’t mirror someone
- Never time the market
- Don’t go by other people’s tips (including here)
In other words, I am trying to tell you that you should not be a copy cat. Just because your friend or neighbor made good money in the stock market, it does not necessarily mean that you should choose the same path. Stop applying the “If he can then I can” like attitude.
There are people who claim that buying a stock at a lower price and then selling it at the peak price is the best way to make money. However, this is a very scary act. You can’t just get into the stock market with the idea of timing it. We might have heard about people doing it repeatedly. But you might have not heard about those people who lost a lot of money in this type of game plan.
Never blindly take stock based decisions just by the word of your friends, colleagues or even people whom you might come across during traveling. If you apply this technique of investing based on people’s tips, you are surely going to lose money. It is a known fact that by the time you picked up that tip most investors have already used that information, living you behind.