Cooper Turley is an experienced investor and advisor; he’s an avid NFT collector. he was also featured in Fortune’s 2021 NFTy 50 — a list of the most influential people in NFTs. In his investment practices, he invested over 100 ETH into music NFTs. While generating vast sums of money from crypto, he shares the biggest pitfalls to avoid while navigating the market. Here are the most common mistakes, and identify ways in which you may be able to stop the habits.
- Buying Shares in a Business You Don’t Understand
One common mistake investors make is navigating toward the latest “hot” industry but knowing nothing or having little information about the company. Insufficient research could make you stand to lose your hard-earned money, particularly if you don’t know the company’s financial viability. On the other hand, proper research and understanding of business will give you a naturally built-in advantage over most other investors.
- Expecting Too Much From the Stock
Another mistake is expecting too many returns from your stock investment. It can be true when buying penny stocks. However, low-priced stocks might appear to be lottery tickets, which allow $500 or $2000 investments to become a small fortune. There’s always a high risk of loss with penny stocks, while investors who expect a small, underperforming company to outperform its peers might be disappointed. Therefore you must have a realistic analysis of what to expect from the performance of the company’s share.
- Using Money, You Cannot Afford to Risk.
While investing using money that cannot afford risk heightens your emotions and stress levels. It will lead to making a wrong investment decision. As you evaluate the stock market, consider your risk tolerance, which is your willingness to lose a portion and your original investment in exchange for higher returns. Evaluate the securities or asset classes you’re comfortable with while determining risk tolerance.
- Being Driven by Impatience
Another mistake most investors make is a lack of patience. For long-term investments, stocks may not experience the desired gains immediately. If the company tends to unveil a new strategy, it may take months or years for the new approach to play out. In most cases, investors will buy shares of the stock and immediately expect shares to act in their best interest.
Conclusion
While nobody is perfect, profit and loss are made in the investment journey. According to Cooper Turley, these mistakes are common and by no means reserved exclusively for you alone. The good news is that these mistakes can be avoided simply through awareness.
