6 Ways You Should Never Invest - Success Resources Richard Tan


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The hardest part of investing can be learning how not to sabotage yourself. The first step is to recognize that we are human beings; emotional, easily influenced, and often, not as good as we think we are.

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6 Ways You Should Never Invest - Success Resources Richard Tan

  1. 1. 6 WAYS YOU SHOULD NEVER INVEST Here’s some things you need to know to avoid the pitfalls many others face if you’ve ever thought about investing.
  2. 2. 1. Letting Emotions Run Wild We’ve said before that the biggest killer of investment return is your emotions and it bears repeating.
  3. 3. 1. Letting Emotions Run Wild Fear and greed rule the market, and the market is irrational. Do not let your emotions overtake you.
  4. 4. 1. Letting Emotions Run Wild Focus on the bigger picture; your investment plan and goals. Rather than be ruled by your own emotions, use the irrational decisions of other investors to your advantage!
  5. 5. 2. Investing in Something You Don’t Understand One of the world’s most successful investors, Warren Buffett, cautions against investing in businesses you don’t understand. This means that you should not be buying stock in companies if you don’t understand their business models.
  6. 6. 3. Falling in Love with a Company Too often, when we see a company we’ve invested in do well, we love their products, what they’re doing, it’s easy to fall in love with it and forget WHY we bought their stock in the first place.
  7. 7. 3. Falling in Love with a Company You bought this stock to make money. If anything changes, it’s time to objectively reassess your investment and even consider selling the stock.
  8. 8. 4. Unrealistic Expectations Slow and steady usually comes out on top – be it at the gym, in school or in your career. Why, then, do we expect it to be different with investing?
  9. 9. 4. Unrealistic Expectations A slow, steady and disciplined approach will go a lot farther over the long term. This means you need to keep your expectations realistic in regard to the length, time and growth that each stock will encounter.
  10. 10. 5. Attempting to Time the Market Successfully timing the market is extremely difficult to do. Even institutional investors often fail to do it successfully.
  11. 11. 5. Attempting to Time the Market Infact, one of our speakers, Marcus De Maria says, “It's not about timing the market, it’s about time in the market.” Don’t try to play the market like you do in a casino, it’s asking for trouble and inviting unnecessary risk.
  12. 12. 6. Failing to Diversify While professional investors may be able to succeed by investing in a few concentrated positions, it’s not recommended for most people. Stick to the principal of diversification. Do not allocate more than 5 to 10% to any one investment.
  13. 13. Success Resources Pte Ltd Main Office: 10/11 Pahang Street, Singapore 198611 Toll Free: 1800 7822 377 Direct: +65 6299 4677 Fax: +65 6295 2441 Email: info.sg@srpl.net Website: http://www.srpl.net