Whether you’re a seasoned investor or just starting out, here are some mental pitfalls to avoid.
• BEING AFRAID TO LOSE MONEY Says Constance: “It’s okay to make some mistakes when you start out. That’s why the money you use should be money you’re prepared to lose – outside of your emergency funds.” She adds that on average, people take about three to six months to learn investing. • NOT BEING PRUDENT ENOUGH Before you invest in a company’s stocks, at least read its quarterly or half- yearly reports to see how it’s doing. Constance says: “A company’s balance sheet, and profit and loss statements, are public information. Read up on the backgrounds of the people who run the business too, to find out how they work and what they stand for.” • FALLING FOR GET-RICHQUICK SCHEMES Sandy says: “Often, we see newspaper ads that offer courses on wealth accumulation or how to get rich quick. Ask yourself: ‘Is this trainer someone from the industry or an amateur who’s picked up some skills on his own?’”
He says it’s important to make this distinction, because even if the trainers have made big bucks, it doesn’t mean they’re qualified to give financial advice. “Always turn to a professional financial adviser and don’t be swayed by the idea of making a quick buck,” he adds.