
Nobody does something perfectly flawless at the first try. Maybe in movies, yes. But in the real world of investing, you will always make mistakes when you are just new at the industry. Even those who have been in the Mobile Trader Platform game for quite a long time still commit mistakes every once in a while.
As a new stock investor, you should keep in mind that making mistakes is completely normal. You can chalk them up to experience.
However, that doesn’t mean you can ditch Forex Trading trying to avoid them. Some mistakes cannot be undone. Some mistakes can cause long-term disastrous effects on your investing journey. But what’s worse that those two are the mistakes that you don’t notice.
Here are some of the mistakes that new stock investors tend to commit. Try to avoid them as much as you can.
Buying stocks on margin
Buying stocks on margin means that you buy stocks by using some borrowed money from the stock broker. As with all loans, the stock broker then puts interest on top of the funds you borrowed. The broker will also have the right to demand for some collateral, usually the assets you have on your account.
In the event that you are unable to pay off your debt on time, the broker has the right to sell some of your assets with or without notice to cover the debt. Worse comes to worst, the broker can put it in its head to liquidate your entire account and sell non-related securities. These all come with trading on margin.
Scary, right? Buying stocks on margin is worth a try but make sure that you have enough experience and you’re pretty sure that you can pay off the borrowed money on time.
Buying stocks without knowing how the market works
This one’s a no-brainer. You cannot expect to be successful in something if you don’t know what you’re doing with that thing in the first place.
Some to-be investors think that stocks are just stocks and that a mere article can help them know how the game really works.
If you haven’t read about what balance sheets, income statements, and fundamental analysis, it’s time to hit the books and grab the nearest financial newspaper. Before you dive deep into the stock market, you need to learn what it is first and how it really works.
Trading stocks too frequently and stacking up fees
There are ultra-aggressive investors that just love to hit that buy button without thinking of the cumulative effects son their expenses.
You have to keep in mind that the more transactions you have, the more fees and commissions you have to shoulder. So if half the trades you have done are just decently successful, the fees you have to pay will still chip away on your money.
If that’s not enough to convince you, studies have shown that investors who do more frequent trades have lower rates of success than investors who barely do anything about their stocks after buying them, or the buy-and-hold strategy.