Monday, November 29, 2021

    Three Common Mistakes of First-Time Investors

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    Naija247news Editorial Team
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    Before you jump into the markets, take the time to learn from the missteps of novice investors. Here are three common first-time investing mistakes.

    Not having a plan

    A common mistake among first-time investors is that they lack a solid plan that will carry them through good and bad times, says Mark Holder, chief investment officer at Oklahoma-based portfolio management firm Stone Fox Capital Advisors.

    Failing to think long-term
    Along with not having a clear plan for their investments, first-time investors often lack a long-term view for their investments, says Zack Shepard, an accredited investment fiduciary analyst and financial coach with Matson Money — a Mason, Ohio-based investment advisory firm.

    Shepard explains that new investors often chose funds based on past performance, limiting their focus to the short term and taking a gamble on what’s hot. He says investors should ask the right questions. Instead of asking what stocks you should be buying, focus on how you are going to measure your portfolio’s diversity.

    Overlooking fees and taxes

    Ulin says many investors purchase commissionable products, such as variable annuities, but really do not understand the fees, investment options and liquidity features up front.Ulin advises new investors to focus on keeping their total investment and product expenses as low as possible. “If your total investment expenses are 3 percent and you are only returning 4 percent net of taxes on your portfolio, you may be better off investing in a 1 percent CD over time.”

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