03 Jul 4 Common Investment Mistakes Entrepreneurs Make
Businessmen are always on the lookout to make money. That’s precisely why they start a business—to make money. And aside from making sure the business is making money, most entrepreneurs continue to invest their money to make more money. But there are so many investment opportunities out there. One should be more circumspect about risking their hard-earned money. To start one’s circumspection, here are some investment mistakes entrepreneurs make and you must avoid:
Throwing money on “hot investment”
Here’s an important tip: if it sounds too good to be true, then it probably is. Beware of the so-called “hot investments.” There are so many out there, just as there are so many businessmen out there who are too impatient about making money. They want money fast and “hot investment” seems like the ticket to do just that. Don’t ever invest in something you don’t truly know and understand. If you really want to take the risk, at least take the time to study this so-called hot investment. Get advice from an expert and talk to people you trust who have made the same investment. And if you do decide on investing, make sure you don’t put your entire life savings on the line.
Not having a personal investment plan
There’s a saying that goes: Failing to plan is planning to fail. Know where your money is going. You should craft an investment plan so your money or the business’s capital will not go to waste. And just like any investment plan, yours should have a specific outline that details your goals and objectives, risks and asset allocation. And if you invest in equities or bonds or stocks, make sure that you study all of these and know how these work. Take note which part of the pie goes to what investment. Monitor your assets and note if these follow your investment plan.
If you are not an experienced trader or stockbroker, then perhaps you don’t have a business doing day trading. This is a financially dangerous activity that should only be attempted by experts of the trade. Also, this type of investment is very risky, therefore, very stressful. If you are already stressed about running your business, it is best to just stay away from another stressor.
Buying cheap stocks
This is one of the most common investment mistakes entrepreneurs make. Because they think that a stock is low, it is a good buy. You have to dig deeper and understand why the stock is sold at a cheap rate. Some investors think that with such a low amount, the stock could only ever go up. You have to consider the stock’s standing last year. If share price plunged from last year, then there might be a good reason for it, and that good reason may just be the reason why you should not buy such cheap stock.
Investing is a tricky venture. There are always risks involved in business and in any investment. However, losses will be minimized if you research about every investment you or your business will take. Always study every investment move to make a smart decision. And since we’re on the topic of studying, it also pays if you learn the investment mistakes entrepreneurs make, which is the best way of avoiding them.
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