Management Corner: Avoid Common Investment Mistakes

from Fence News October 2022

by fencenewsusa

Sensar Awarded Two Significant Energy Sector Contractors in North America

Management Corner

AVOID COMMON INVESTMENT MISTAKES

Investing can be a complicated business. Once you’re invested, you become vulnerable not only to the volatility of the market, but to the whims of your own financial strategy. Even when you have a financial advisor, which is wise for virtually anyone considering an investment, your advisor is only able to work with the information you provide. It’s not uncommon for people to implement what they’ve heard recommended as a “can’t miss” financial strategy with dreams of hitting stock market gold, but when it comes to investing, an honest and mapped-out strategy is integral to any plan.

One of the easiest ways to get off on the wrong foot is to over or underestimate your risk tolerance. The highest returns are often found in the riskier investments, and because we all want to get the most bang for our buck, it can be tempting to put our money toward the investment that has the biggest pay-off. If you have a low risk tolerance, however, putting your hard-earned money into a high-risk investment may not be the best approach, there are investment options available for every risk level. When you enter into an investment strategy, you have to be honest about how much risk you can handle, what your goals are and how you can realistically reach those goals.

Another common mistake people make, is investing in things you don’t understand, based on just a tip from a friend or relative, or from something on the news about a certain investment. There’s absolutely nothing wrong with exploring investment options, or getting more information about a hot stock, but it’s best to put your money toward a business you understand. Some businesses and industry are highly regulated and complex, which can get confusing for stockholders. Perhaps the most common -- and in some cases, the costliest – mistake people make is waiting too long or for the right time to invest. To truly profit from the world of investing, it’s best to start as early as possible. There are many, many benefits to starting early, the most obvious being that you have a longer period of time to earn money.

Another great benefit of investing at an early age, is that you can afford to take more chances. You can make the decision to put money in more aggressive investments, because unlike an investor who is 50 or 60, you have time to recover from any losses you may incur. It’s certainly never too late to invest, but don’t make the mistake of putting it off longer than you should just because you don’t feel like you are old enough or wise enough to get started.

If you are new to investing, it’s best to consult with a trusted financial advisor if you’re not sure of the best path to take. Financial planning isn’t just about looking at numbers and interest rates. Sometimes people want to do what feels right for them, their situation and most importantly, their life goals. Everyone is different. A good financial advisor understands that and will work with you to maximize your investment within guidelines you outline.