A Little Article About Investor’s Biggest Mistakes

by Investing School on November 10, 2008

fear and greed are investors' biggest mistake
While surfing the web on a sunny Monday morning, I ran across a MSN article titled Investors’ 5 biggest mistakes. It was an interesting and bold title to say the least which intrigued me to click on the article. The author claims that the 5 biggest mistakes (and ones that people are making right now) are:

  1. Panicking and selling
  2. Tuning in too much
  3. Halting retirement contributions
  4. Veering from your plan
  5. Holding one basket on the upswing

During times of economic downturn, it’s very easy for us start panicking and sell because we watch CNBC too often. Those evil media companies really spend a lot of time making us scared because it’s their job to create drama to increase viewership.

There’s no doubt that we are in a pretty severe economic downturn but just like every other recession, we will come out of it stronger than ever. The last thing we want to do right now is panic because fear will drive us to (the first four points the author made):

  1. Sell investments
  2. Watch the news thinking it’s going to save you but in essence makes you more scared
  3. Stop contributing to retirement funds
  4. Move your asset allocation to safe investments

Then finally when the market rebounds, greed takes over and investors will make the final mistake of just concentrating on hot stocks. We will forget all about diversification and all the money we’ve lost without it in the past.

If those are 5 investors’ biggest mistake, perhaps two will suffice: Fear and Greed.

Promote or Save This Article

If you like this article, please consider bookmarking or helping us promote it!

Print It | Email This | Del.icio.us | Stumble it! | Reddit |

Related Posts

{ 2 comments… read them below or add one }

Calvin November 11, 2008 at 7:56 am

No one ever learns. They always fear at times like these and be greedy when times are good.

This reminds us again not to be stupid. Good post.


Samuel November 11, 2008 at 1:07 pm

Fear is right. Everyone is so scared right now that it’s very easy for me to buy because no one is bidding against me 🙂 I’m snatching up tons of great names at incredible prices right now.


Leave a Comment

Previous post:

Next post: