Avoiding pitfalls when investing

Investing can be a great opportunity to increase your income. It has its own pitfalls however, that should be avoided.

07:47 22 December 2013

Getting into investing means taking risk and it can spell financial ruin if you are not careful with your investments. This is why it is important to know what the pitfalls are and avoid them. Making informed, logical, and rational decisions when it comes to picking investments can make a huge difference in the amount of risk you take. 

 

Here are the pitfalls to stay away from: 

 

• Greed – Do not get too greedy. Most investing involves taking time. If you are being promised fast and high returns, make sure to research the investment. Getting greedy and looking for the fast and high return can often spell disaster.

 

• Do not go into investing with your emotions. Emotions have no place in determining what you should invest in; you should be looking at the numbers, the statistics and the percentages. You should not be picking your investment opportunities with your heart or your emotions. It might sound like a great way to help people or it might be a cause that touches your heart, a company that believes the same as you do, but that does not mean it is a good opportunity for an investment.

 

• Establish goals. Goals give you something to work towards when you are investing. It gives you a plan you can use to keep yourself on track. 

 

Research everything when it comes to making an investment. Investing has a serious risk. You need to have a clear understanding of what you are getting into and what is going to be the returns on your investment before making a decision. This can help you to evade all the pitfalls; it is hard to be emotional with research and greedy when you are looking at solid numbers and facts.