Big Investment Mistakes

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Big investment mistakes could mean big personal loans, lost cash, and even bankruptcy. Are you making these big mistakes?:

1) Not investing at all or investing too little. This is the most common mistake and one that is easily fixed. If you are worried about risking your money, invest in a low-risk option – such as CDs – but do invest your money so that you will have money in an emergency or in retirement.

2) Not doing research. If you find an investment opportunity, make sure that you research it carefully. Is it legitimate? Where is your money going and can that person or company be trusted? How have other people done with this investment? How much can you expect to make? The more you know, the easier it is to make a good decision.

3) Not considering risk and return. Generally, the higher the risk, the higher the potential return. The smaller the risk, the less cash you stand to make. Consider how comfortable you feel with risk and invest accordingly, or you will either worry a lot or be disappointed by small returns.

4) Not diversifying. If you have only stocks, you will feel panic when the stock market is suddenly shaky. To protect your money, invest in a few things – stocks, retirement funds, and CDs, for example. Make sure that you have some higher-risk investments and some surer, lower-risk investments as well.

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