The uber investor Warren Buffet once conceded that the biggest mistake in his investment career was not picking up additional stocks of Wal-Mart (NYSE: WMT) during the 1980s. The only reason he did not pick up extra stocks of the shopping store that would later on became the behemoth of corporate world was because he felt the stock price wouldn’t appreciate enough. That mistake cost him $10 billion in potential profits later on.
In other words, the investment guru let his emotions make the decision for him that resulted in the billion-dollar investment blunder. This shows that even seemingly flawless investors sometimes make unwise investment decisions. Ordinary investors tend to make even greater mistakes when it comes to investing their precious money.
It is true that there are no hard and fast rules about avoiding losses or maximizing earning potential of the investment. A certain amount of risk is inherent in ever investment decisions. Yet, there are certain mistakes that you should avoid at all costs to ensure that the invested money remains safe and secure. Here are 10 common mistakes that you need to guard against while making investment decisions.
The most common and yet the most dangerous mistake when investing is not diversifying your investment. Diversification is the foundation of a good portfolio management strategy. The investment amount should be spread out over different investment avenues. An ideal investment portfolio contains different types of financial instruments, not all of which move in the same direction. Having a portfolio of dissimilar investment instruments will protect the investment in case of adverse market conditions.