It is easy to get enamored with various investment opportunities available. The very idea of doubling your money quickly could make you commit some grave mistakes you ordinarily wouldn’t. Who can blame you though? Some deals are just too good to resist.
The ideal thing is to identify these little mistakes that could be the end game for your investment and avoid them as much as possible.
- Going in blind
We already established the fact that some deals just sound too good to resist. Companies tend to make their investment plans sound much more than they really worth. A lot of people fall victim to their own ignorance. Nigerians are especially in the habit of investing because of ‘word of mouth’. They invest simply because someone they know and revere invested
You have no business investing in companies whose business models you don’t understand. Do not mistake such decisions as risk taking. Make sure you understand the company/stocks before you do invest. Do your research to find out the business operates; growth, profit, and liquidity.
Everyone is in a hurry to hit the big bucks. No one thinks about the phrase “slow and steady” anymore. This is the major mistake people make in Nigeria.
Given the present state of things, you should learn to exercise patience. Keep your expectations realistic with regards to the duration and growth rate of each stock.
- Misplaced Passion
Investment is one business that should be done without sentiments. It requires your 100% focus as well as a logical and rational head. Don’t feel pressured to invest against your better judgment because you have sentiments towards the business owner or the person who introduced you to the business.
Nigerians are also fond of holding on to a failing stock out of a biased hope that things will get better or hurriedly sell off their stock at the first sign of loss out of fear. Keep a level head and draw the line between risk taking, caution and paranoia.
- Investing beyond capabilities
These are the worst kinds of mistakes investors can make; investing more than you can handle at a time. Some go as far as roping themselves into debts in order to make the investment they desire. This is more frequent with people who make ‘spur of the moment’ investments.
Please only invest the much you can at a particular time. You can make more investments with time. Some investments tend to keep your money tied for a long period of time. This is why you shouldn’t invest it all at once. Think of ‘rainy days’.
- Brushing the law aside
Every investor is strongly advised against ignoring the law as this could come with drastic consequences. It is common for people to think they can evade the law but eventually it all catches up with them.
Get yourself legal counsel. Your lawyer will stick up for you in times when things go wrong. Lawyers do a great job of protecting your interests as well as resources in any business investment. This reduces risks and problems with the law in future.
- Trusting too much
It should be clear by now that in investment you can’t afford to trust anyone too much especially when it concerns investment and information. With the wrong information you could make a life altering decision. You could end up buying stocks when you should be selling or vice versa.
Caution is the watchword if you intend to successfully play this game called investment. Your ability to read and understand the market and market situations will be tested at every turn so rather than trust anyone, only trust the facts and your instincts.
- Disregarding the market
As incredible as it sounds, people really make the mistake of disregarding the market. This often comes from a sense of overconfidence in one’s ability.
To stay on top of your game in investment you need to be toe-to-toe with the market and market situations. Don’t just invest and wait for returns. Watch over your investment. Keep a close eye on the market and act accordingly.
- Failure to prepare
Nobody wants his or her investment to flop. On the contrary’ everyone waits expectantly for returns on their investment. The harsh reality though, is that we don’t always get what we want. This is why you need a contingency plan. Planning for contingency makes the brunt of the loss a lot less.
There is no right time to start investment deals. There is no set amount that you can start with either. Those reasons you have for holding back are probably baseless.
Don’t put it off for next time. There really is no time as good as now. The longer you wait before investing, the more elusive your financial future seems.
- Going in too deep, too early
Knowing yourself and the level of risk tolerance you can handle is definitely necessary for investments. A lot of people crash and burn as a result of going in water that is deeper than them. Be sure that the risk involved in the investment you are venturing into is equivalent to what you can handle.