If you are planning to invest in shares in Bursa Malaysia, you will need to be cautious while being a risk taker to a large extend. This is mainly because investment in itself is a risk taking venture where if you are not taking any of them or afraid of taking them, then it would not be the right type of deal for you. However, facing risks do not mean that you are bound to lose because if you are aware of what makes a sound investment then there are profits that you can surely enjoy. There are many mistakes that even the most professional and experienced investors make. This still happens because while many investors do learn from their mistakes, it is the market forces which sometimes drive them to commit the mistakes again. How then could you avoid making them? Below are some of the advice you can use.
1 – You are not the only one making mistakes
The most important thing you must be aware of is that all the techniques and methods have been tried and many had failed. So if you have made any mistakes, rest assure that you are not the only one who did because even the most professional and expert investors do make simple mistakes. Professionals are experts not merely by luck and education. One thing for sure, there is no such thing as a seminar or get-rich-quick method through share investment. No one becomes a millionaire overnight by attending a course or graduated with a degree in economics. Most professionals are experts because they have many years of experience under their belt.
2 – Not having a trading plan
Another mistake many professional investors make is to venture into their investments without a proper plan. This refers to the trading plan. If you are going to invest for the long term, then it must be known here that consistency is everything. If you are planning to invest in the Main Market of Bursa Malaysia, then stay focused for a while. Some investors jump between the Main Market and then into futures and then back to the ACE Market and expects to turn their investments into profits. The problem here is that without staying focused, your plates become too full and you end up having to monitor several markets all at once which will divert your attention. Apart from that, your trading plan must also have a consistent way of indicators where you must ensure that you follow a common one instead of changing them every other time. The most important issue here is that trial and error might not be the best method. Get a plan and stick to it!
3 – Banking on luck – investment is not gambling
Depending on luck alone will not get you far in the stock market. If you are that ‘lucky’, then you need not have to invest in stocks where you could win in any gambling manner. The difference here is that investing shares allow you a certain level of control of your investments while gambling do not. The latter is basically a game of chance where you place your money in a certain possibility and banks on that. On the other hand, you can cut your losses if the shares are not performing or increase your investment if they are. Never pick a stock randomly, always do your homework and find out about the company before buying its shares. This way, you will be able to foresee and future changes like expansion plans, downsizing and such which will then allow you to take countermeasures if required. Gambling do not accord you with such a provision.
4 – Going solo
No matter how well-versed you think you are, you should find a mentor who could help you in your investment options. This is where a more experienced or just a partner investor could help you to see certain signs which you might have overlooked. Many investors like to venture into the markets on their own because they felt that they know their trade best. A mentor is someone who will be able to help you avoid any mistakes that you might run into because you might be too indulged in a particular stock. You can refer to this person as a ‘wing man’ who is interested in the similar investments who could complement you in your investments and to offer you opinions which might be useful to you.
5 – Ignoring your investments
Depending on your availability, you must try to monitor the market as often as you could. Many investors leave the monitoring to their remisers who could have helped do the job but if you are in touch with your investments personally, then you have a better grasp of the stock’s behaviours which will help you determine future purchases and such. Apart from that it would also help you to decide when your ‘exit point’ would be. Selling your stocks at the right time will help you to cut your losses. Under some circumstances, you might be earning lesser but a small profit is better than none.
6 – Letting confidence cloud your judgment
Ultimately, your personal confidence is an important factor and no matter how confident you are that the stock is going to reach a price, never let your ego cloud your investment. A plan must have a reasonable entry and exit point and they must be realistic as well. To enjoy profits in the share market, you must be contented with the profit you are making instead of going for the high income method which might be overly risky in most cases.