Last Updated on Mar 23, 2020 by James W
If you are new to the investment game, there are some common traps that you could create for yourself. It’s important to learn about these traps, because although you will learn from your mistakes, there can be drastic repercussions if you make an enormous error. In this brief guide, we’re going to take a look at some of the things that first-time investors should watch out for. Let’s get started straight away.
There are no guarantees
Some investments are less risky than others, but that doesn’t mean there are any guarantees. Even the biggest brands in the world suffer stock market dips at various points throughout the year. And, if that stock value plummets too low, it could see you lose all of your money. Nothing is 100% stable, so bear that in mind when you are planning your budget.
It’s a long-term game
Although you can enjoy dramatic short-term successes in the investment game, they are few and far between. Sure, you may get an insider tip, but these often come to nothing, and even if you win big you could be in breach of the legalities that surround investment trading. So – unless you want to risk fines or a possible prison sentence – long-term planning has to be your objective.
You have to research
Research is everything in the world of investment. It’s not just the stock market you need to watch, either. The world is delicately poised in every respect, not just for money, so think about that when you start to make your first steps into investment. It’s a little like the butterfly effect. An event could happen in a country on the other side of the world that means production of a resource halts. That resource is used to create electronic chips, which power every smartphone. All of a sudden, smartphone manufacturers can’t make any more product, and their stock market price crashes. Situations like this have happened a lot over the years, and it can affect the biggest companies in the world.
You need help
Whatever you are investing in, if you want the best results, you have to put the time in. Watching the market is a full-time job, and it’s your money on the line. So, if you just don’t have the time, then you will need help. If you are looking buying houses to rent out, think about hiring property investment services. If you want to invest in government bond schemes, hire a financial advisor who specialises in them. Make sure you track down a reputable company and let them do the work for you. Yes, you will have to pay them, but the amount of extra profit you can make will pay for it.
Although society seems to place investors on a higher pedestal than those that frequent your local betting shop, they are essentially the same thing. Never underestimate that fact, or you could end up in the same situation as those you consider far less fortunate. It will be addictive, and the thrill of one big victory will spur you on, in spite of the many, many small losses that you have made. So be careful, stay safe, and always get help if you think you need it.