We all have big goals to achieve this year, which may include investing and making money.
But having big goals isn’t enough.
If you don’t have a new plan, you’ll continue doing the same things and achieving the same results.
When it comes to business and investing, it’s quite easy to get used to doing the same things over and over again.
Our financial habits are well ingrained, and may be difficult to change.
But change we can, if we could start avoiding some simple mistakes that easily set us back on our financial goals.
In this article, we’ll be looking at 7 investment mistakes we can avoid this year to help us make better investment decisions and improve our finances.
Let’s get down to it.
Not Improving your Financial Literacy
The biggest investment mistake you can make this year is not improving your financial literacy.
No matter your financial status or your knowledge and experience of investing, you can still learn new ways of doing things.
In this information age, your financial knowledge could get obsolete within the twinkle of an eye.
What made you money last year may not be so efficient this year. Newer investment opportunities may just be waiting for your improved decision-making.
There is a thin line between making an astute investment decision and making a disastrous one.
And the difference could be in acquiring newer financial information.
Why are you choosing to make a particular investment decision?
Is it because you see a good opportunity for profit or because everyone you know is making that same investment?
The fear of missing out (FOMO) is real, especially for popular assets or schemes.
But being popular doesn’t make an investment a good one for you.
It was Robert Kiyosaki who said that when an investment opportunity gets too popular, it is most likely that the party is over and it could be too late to invest.
In other words, the most astute investors find early investment opportunities before the bandwagon joins the party.
They do not wait for the bandwagon to convince them of what investment to make or not to make.
If you want to make the best investments, then you have to find them either by yourself or through your associates.
Never be led by the bandwagon.
Investing without an exit plan
I’ve been told by a mentor over and over again: The primary goal of an investor is to exit profitably.
From the beginning, a good investor already has an exit plan. Always.
It would be foolhardy for an investor to keep investing and hoping that one day they’d make a profit.
They draft out a plan to input money and output profit. And they make sure that the system (product, people, market, customer) is right.
If you want to make more money investing this year, then you should always have an exit plan for your investments.
No one is going to take you seriously if you don’t have a plan.
Pursuing Quick Profits
The funny thing about investing is that the majority of most acclaimed investors are merely gamblers.
All they do is run after HYIPs.
And guess what? They almost always get their fingers burnt.
Don’t get me wrong. Pursuing profits isn’t a bad thing. In fact, it is a required mentality for finding good investments and making profit.
However, putting your money into unstable investments just for a quick turnaround isn’t always sustainable.
Most likely, these quick profit systems are scams and they are designed to take money from the gullible.
If you want to make good investments this year, then you have to be prudent in your investment decision-making.
There is no stability when speed takes the wheel. Likewise, there is no speed when stability takes the wheel.
Spray & Pray Investing
Do you need to make 10 or 20 investments to hit just one home run?
If that’s you, then you’re investing the wrong way.
I hear people say; “don’t put all your eggs in one basket”. Yes, that’s right. But you don’t need too many baskets.
Making too many investments and hoping one or two clicks shows that the investor doesn’t know what they are doing.
It reeks of ignorance and confusion.
If you know what you’re doing, then you wouldn’t just invest and hope that something comes out of it.
Like the saying goes; hope is not a strategy.
If you want to make the right investments this year, then you need to find proven investment assets and a strategy to profit from them.
You can’t hope your way to profits.
This is a culmination of all the above investment mistakes.
When an investor fails to improve their financial literacy, chooses bandwagon investments, invests without a plan, and pursues quick profits, they eventually are misled to overinvest.
They end up buying overpriced assets and investing more than they can afford to invest.
I remember about 3 years ago, a particular stock was trending for its price rally over a period of 3 months.
That particular stock grew well over 250% in just 3 months to reach its highest price in 5 years!
And guess what?
Everyone and their dog thought that stock was the best thing to invest in at the time.
I remember a particular family friend of mine who had just returned from his studies in the UK was in that group, and he chose to buy that stock at its highest price.
He didn’t care what caused the price increase for that stock. As long as it was a trending stock, then it was a good stock.
But guess what?
By the end of that year, the price of that stock fell hard and never recovered up until today.
It was in the news, and you may even know what company stock it is.
So, what’s the moral of the story?
It is the fact that over-investing is one of the simplest mistakes to make while investing.
You could fall for the gibberish that the worth of an asset is the value placed on it by the investor.
But I beg to differ.
If you want to make the right investments this year, you have to learn to find out when an investment is bloated.
And you know what to do. Run for your life before it bursts.
Investing too Local
The final investment mistake we should avoid making this year is investing too local.
Investing locally is good, but investing too local is risky.
Letting all your investments to be susceptible to the same environment, laws, and social factors is a big risk to take, especially if you’re in Nigeria.
Nigeria is one of the most hostile environments for business and investments.
The unstable political scene, insecurity, and the insensitive business and tax laws could destroy your investments before you blink.
If you want to make good investments this year, then you must choose to avoid being too local.
Invest in foreign stocks, hold stable cryptocurrency, invest in technologies that are not affected by local factors, hold funds in foreign accounts, and keep your investment strategy as flexible as possible.
If you can stay smart enough, you’ll keep getting paid.