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Michael Zienchuk, MBA, CIM
Investment Advisor, Credential Securities Inc.
Manager, Wealth Strategies Group
Ukrainian Credit Union Limited |
It isn’t always easy being a successful investor. Especially in times of market volatility, when every investment professional or stock picking specialist has a million ideas for you to follow. More often than not, good investing is as much about avoiding doing the wrong things as it is about doing the right things.
Some of things one should do include: spend less than you earn; focus on getting your investments to pay you back (dividend paying stocks are a good example); don’t put all your eggs in one basket (diversify your investments), and; remain focused on the long term.
That said, there are a lot of ways that investors become side tracked from these key principles, and their strategy become derailed due to very common mistakes that so many investors make. Below, we focus on the most common of these mistakes that investors tend to make, which makes it difficult for them to generate a decent return.
First mistake is to consider yourself a trader, not an investor. An investor has patience, and sometimes it will take a while to see a trading strategy work itself out. A trader looks at the very short term to determine his or her success – a day or maybe a week. If the trade doesn’t work out, they will exit the position. An investor has patience – they bought the position because they understand and believe in the stock because of its business position, management team, new technology. Here, the investor behaves like an owner of the business, and is focused on the long term, often letting rising profits and dividends drive the stock price higher over time.
