Investing is a great way to have another flow of income aside from your salary income. However, the wide world of investing can be overwhelming, and the step towards investing in something can be risky.

Sometimes, it’s a risk worth willing to take, but it’s important to know when you’re making a big mistake. 

If you are an investor, or you’re looking to become one, here are some ‘don’ts’ that you should keep in mind.

1. Don’t Think Crowd Support Means Success

It can be easy to get caught up in an investment trend or a whirlwind of a specific share – especially if everyone you know seems to be investing in a specific asset. But it should be known that the number of participants don’t necessarily mean success. 

In fact, more people tend to buy shares when a company is seeing great numbers. But when we see a steady decline, these same people will be the first ones to sell. It’s important to remember that:

Time in the market is far more important than timing the market. 

Just take the GameStop incident. Many people started investing in the company after more and more influencers started piling on. However, once the trend died down, GameStop stocks started falling back, losing investors far more money than they started with.

2. Don’t Put All Your Faith in Forecasters

Trusting in forecasters sounds like a no-brainer. They have analysed the market long enough to make smart predictions about what to invest in and what not to invest in. And while these predictions are based on data and trends, it can be risky to place all of your faith in them.

At Leo Wealth, we find that investors can enjoy better performance from their investments by taking a strategic, long-term, diversified approach. 

Trying to time the natural rise and fall of the market is time-consuming, stressful and can lead to disappointing results. It is far more effective to protect your investments by diversifying – placing your money into different assets and opportunities so that when one investment drops, your money will be protected by your other investments. 

3. Don’t Monitor Your Investments Minute by Minute

As the saying goes, “A watched pot never boils.” Sure, it’s natural to fret over investments because you have put a lot of money into them. However, there is a risk of making hasty decisions when you are closely monitoring it. 

If you see that an asset is underperforming, you might want to sell immediately. But you are actually preventing your asset from seeing possible growth. If you make your decisions based on monthly performance, you are depriving your investments of the chance to grow on a yearly basis.

4. Don’t Be Afraid to Invest

Lastly, don’t be afraid to invest. While there are always risks involved, with the right research and knowledge, you can earn passive income to help you in the long run. 

The later you put off investing, the more you are stunting potential asset growth. Having passive income on top of your active income will help you build up a retirement fund that you can use later on in life.

Ready to Invest with the Help of a Trusted Central Coast Financial Planner?

While there are a lot of risks involved, investing can be a great financial strategy to earn you more income without having to work harder.

If you need help making the right investment decisions, it’s best to consult the experts. At Leo Wealth, we offer financial advice on the Central Coast. 

Consult with us today for goal-oriented financial advice and wealth creation.