Your investing habits significantly influence your portfolio and the chances of achieving financial success. In this article I share the three worst investing habits based on personal experience and observations.
Checking your portfolio daily
Do you find yourself constantly checking your portfolio, even multiple times a day? While it may appear like a responsible action, frequently checking your portfolio can provoke knee-jerk buying or selling decisions based on short-term market fluctuations.
At Stockspot, we advocate for a principle of restraint, endorsing a more patient, long-term approach. Regular but less frequent portfolio reviews encourage an investor to consider broader market trends and make better-informed decisions.
The best approach is, counterintuitively, to do nothing at all. Avoid checking your portfolio every day or even every week or month, as longer intervals between checks tend to result in better returns.
Buying shares based on their popularity
Have you ever felt tempted to buy assets just because they’re trending or in the news? This ‘herd mentality’ investing habit was starkly exposed during the 2017 bitcoin rush and the 2020 market crash. Many investors who jumped on these bandwagons incurred significant losses.
Instead of chasing the latest trends, investors should resist the temptation and take a more informed, strategic stance. Avoid chasing trends or buying assets solely based on popularity.
“Avoid checking your portfolio every day or even every week or month
Don’t brag, stay humble
Finally, do you find it challenging to resist the urge to brag about your profits, particularly after making significant gains? While it’s not directly backed by empirical data, I’ve observed a pattern over time: maintaining a low profile regarding financial victories often leads to sustained success.
From my experience, bragging about profits often leads to a reversal of luck. It’s best to remain humble and avoid discussing your successful investments.
In conclusion, cultivating healthier investing habits—like moderating portfolio check frequency, avoiding the blind pursuit of trending investments, and practicing humility in your financial success—can profoundly enhance your investment journey.
With conscious efforts to steer clear of these common investing pitfalls you’re laying the groundwork for consistent and profitable financial outcomes.