Here are tips from my mentor Marshall Reddick that can help you steer clear of pitfalls when investing. Investors themselves often block the path to success with self-defeating attitudes, actions, and especially inaction, failing to "get out of their own way." While intelligent investing is obviously a better strategy than ignorance, succumbing to "the paralysis of analysis" thwarts any chance of success. Steering a balanced course between the two poles of over- and under-thinking is the key.
1. Making Investments During Major Life Changes
Making major career or life changes while pursuing investments disrupts the secure foundation crucial to success as an investor. Change itself is an inevitable part of life, but be sure to regain your solid footing before plunging into an investment.
2. Letting Your Personal Circle Influence Decisions
Letting your personal circle or "sphere of influence" affect your investment decisions can be dangerous. Be careful where you get your advice and consider the source. Failing to stay in control of your investments endangers your financial future. The way to avoid paying hefty fees, often for bad or even fraudulent advice, is by being a direct investor. Knowing yourself will help launch you in the right direction as an investor, and steer clear of the self-sabotaging behaviors that derail even the best-intended plans.
3. Failing to Listen to Property Managers
Failing to take the advice of property managers can be as big a mistake as heeding only their counsel. Ideally, investment counselors draw on a wealth of information to provide impartial advice. But investors ultimately must rely on their own judgment. Enlisting the services of a qualified property investment adviser to help you manage your portfolio and keeping the lines of communication open is essential.
4. Panic Buying or Selling
Panic buying is deadly for investors, but panic selling is even more perilous and prevalent. While it's never wise to blindly rush into a deal, it's just as dangerous to react to a random setback with a knee-jerk decision to sell. Likewise, investors whose stock answer is "No" block access to opportunity, while "Yes" is the key that opens doors.
5. Investing in Wrong Kind of Instruction
Investing time, energy and resources on the wrong kind of instruction is a common and costly mistake. Instead, pursue an education that teaches how to find success where others have failed, creating avenues for opportunity.