4 Common Investment Mistakes to avoid

It is important to realize that mistakes are common when investing, especially as you embark on your journey to financial independence. However, they can easily be avoided if you are aware of them and so, know what to avoid. Here are 4 major mistakes to avoid when investing:

1. Chasing Popular Trends

A few months ago, it was Shiba Inu; while a few weeks ago, it was the Squid Game coin getting the attention. There are always going to be popular get rich quick opportunities, but it is important to either avoid them or at the very least, approach them with a healthy dose of skepticism. In many cases, people hear about an investment when it has already performed well, meaning it may be overvalued and at risk of dipping.

2. Taking too Little Risk

The flip side of chasing popular fads can be taking too little risk. “Risk” is often considered a negative word but when it comes to investments, a healthy level of risk is good. This is because, while minimizing risk can feel and sound like a safe move, you could miss important market rallies. With inflation eating away at the value of money every year, most investors need at least some growth-oriented investments.

3. Lack of Patience

People love fast money but a progressive approach to portfolio growth will yield greater returns in the long run. Setting unrealistic expectations for investment performance is a recipe for major disappointment. This means you need to keep your expectations realistic, especially regarding the timeline for portfolio performance and returns to manifest.

4. Failing to Diversify

One of the most common investment terms you hear is “Diversify”, and for good reason. Diversifying your investments creates a cushion for you, so you don’t lose all your money if one of your investments goes awry. Ensure your portfolio of investments is well diversified, so that you are not over-exposed to any individual segment.

Avoiding these investment pitfalls will put you in a much better position to achieve your financial goals. At AXA Mansard, our team of advisors is available to support you and help ensure that pitfalls like these and more are avoided. If you have any further questions, please don’t hesitate to email clientservices@axamansard.com. You can also speak to an advisor for financial advice.