We all make mistakes in many areas of life. These mistakes are usually fairly harmless — we took a wrong turn while driving, used the wrong ingredients in a recipe and so on. But sometimes, our mistakes can be costly — especially those connected to investing.
Here are some of the most common investment mistakes:
• Too much buying and selling – Some people find it exciting to constantly buy and sell investments in the pursuit of big gains. Yet, frequent trading can work against you in a couple of ways. First, it can be expensive — if you’re always buying and selling investments, you could rack up taxes, fees and commissions. Perhaps even more important, though, excessive purchases and sales can make it difficult to follow a unified, cohesive investment strategy. Such a strategy requires, among other things, careful construction and management of an investment portfolio that’s appropriate for your goals, risk tolerance and time horizon. Heavy trading can disrupt this strategy.
