I’ve compiled a short list of things to look out for when figuring how to avoid wrong investment and how to make wise investment decisions.
Do not follow the crowd. The most common mistake in the investment world is following what everyone is doing. Whenever people hear investment stories, they allow excitement to take over their sense of reasoning and judgement and it usually takes a long time to realise that they were overpaying for opportunities. if you hear about a hot new investment, the chances are the value has dropped.
Avoiding loss: Affluent investors are not averse to risks; they are averse to losses. The way a decision is framed affects the outcome. To decide on a risky investment, you have to think in terms of personal outcome. There are investment decisions that if you are right, you will make a handsome profit; if you are wrong, you will have to work more years until retirement. Now, do you want to make the investment? always go with a safe investment option and do not listen to people saying you have to loose to gain. What is important is how much risk you need to take rather than how much risk you want to take.
Overconfidence: Most affluent investors tend to ‘over-rely’ on their own judgment. Even when they work with a financial advisor, they expect the expert to produce higher-than-market returns. Good investors should look for long-term, consistent returns.
It is advisable to always take your time before you commit to an investment plan. do your research too, and always stay within a realistic expectation. Investments that promises thousands of return within a short time is a red flag.
A good businessman is always learning, so make sure you never get tired of thirsting for more knowledge.
Remember ; financial intelligence is the gateway to riches
You may want to check out How to be a good businessman