Amateur Investors

Often times, amateur investors make mistakes that could have entirely been avoided if they had prior knowledge about how investments work.

Investing is gainful when planned well and all options/measures weighed and considered. This is the message SCM Capital tried to pass across, yesterday, when the company took to Twitter to share five mistakes to avoid as an amateur investor.

We have carefully curated the content for your reading/learning pleasure. Hopefully, this will help you to figure out the best ways to invest properly.

Five mistakes to avoid as a beginner investor

1. Investing for the sake of it: You’re more likely to succeed if you have a specific goal in mind, an idea of how long it will take, and a clear plan to help you achieve it.

2. Chasing performance: When it comes to investing, past performance is not necessarily a good indication of future performance. Your fund selection decisions should be based on your investment goals, risk profile, and time horizon. #scmcapital #edenhazard

3. Falling for the hype: While you shouldn’t completely ignore advice from a reputable, experienced source, rather listen to the experts – SCM Capital’s website, Twitter and other social media handles are a good place to start to gain market insights

4. Expecting smooth sailing: Volatility is a natural aspect of the markets

5. Buying the popular assets and ignoring cheap ones: Popular, trendy assets aren’t always a good investment (they may be overpriced), and cheap assets aren’t necessarily a bad investment(they may be quality assets whose prices are down for non-fundamental reasons).

While it’s never wise to try to time the market, it’s worth checking in with your financial adviser to find out why a share is trading at a discount (in other words, priced cheaply).

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