Mistakes that adversely affect your portfolio
Making investments into stock and mutual funds could be one of the highest return yielding ventures. Probably, this is the place where your money can grow in leaps and bounds.
However, there are a few common mistakes which people make and this is what ruins the entire portfolio of the beholder.
Some of the commonly made mistakes are mentioned below:
When we sit down to evaluate our investment and the return, mostly the quantitative figures are looked into. However, it is equally important to evaluate the qualitative value of our investment.
Analysis of Catalysts
In a market like stocks and mutual funds, there is no particular factor or parameter which can impact your money’s growth; there is always a cumulative source of catalysts. So, ignoring many of these factors and picking up on one factor only could be an incomplete analysis.
Timing of buying and holding
The general trend is when a stock performs well, the investor wants to sell it off and when it doesn’t do so one wants to come out of it. However, when a stock performs well one should wait for even longer period of time to realize the best of the profits.
Trading too short and too much
Sometimes, in the desire of making money, investors start trading at a too short a time and quite frequently.
But, the matter to focus here is the “brokerage” one has to pay for every transaction he makes. This certainly curtails your profit and actually makes you a loser rather than a gainer.
Incomplete knowledge of terms and conditions
Many a times, people enter into a mutual fund, without reading the terms and conditions well and even without reading the “Entry or exit load”. This will only eat into your growth of money instead of making your money grow.
Buying before making a research on the stock
When media promotes a given stock, as investors we get lured and attracted towards a given stock. But, the best is to read the overall performance and evaluate it and then buy a stock.
Stock investment and mutual Funds are a good source of providing faster growth to the money if the investors are more careful than they usually are.