Investing mistakes to avoid

All investors screw up — even the best ones. But the more mistakes you can avoid, the better. Here are some common ones:

Investing before you’re ready: If you’re deep in credit card debt or you don’t have a fully funded emergency fund, think twice before investing.

Thinking it’s too soon to invest: Yes, retirement is many decades away if you’re still 20-something, but that means money invested now will have many decades in which to grow for you. That’s powerful!

Thinking it’s too late to invest: Even if you’re 50 or 60 now, you may live to 90 or beyond. Some of your money may have decades to grow. In only 10 years, you can roughly double your money if it grows at an annual average rate of 7 percent.

Investing too aggressively: Those aiming to get rich quick (or those who simply don’t know better) may invest with borrowed money (using “margin”), buy penny stocks, try day-trading and so on. The most reliable way to get rich with stocks is to buy into high-quality, growing companies at reasonable prices, aiming to hang on for many years.

Investing too conservatively: If you’re too cautious with your money, sticking with savings accounts, certificates of deposit (CDS) or money market accounts, it’s not likely to grow at a useful rate (and may not even keep pace with inflation). Long-term dollars are likely to grow fastest in stocks, but money you will need within five years or so can — and should — be in safer places.

Being impatient: Impatience can lead you to sell a great stock that might do well in the coming years. You need to stay the course, through boom times and sluggish times. The stock market can be volatile, but over long periods, it has always gone up.

Not learning: To become a better investor and manager of your money, always keep reading and learning.