3 of the biggest mistakes first-time investors make
In conversation with nestegg, Robert Francis, the Australian managing director of investment platform eToro, flagged three of the biggest mistakes that new investors make – and how to avoid them:
1. Going in completely blind
“Jumping into the stock market without having any prior knowledge is not wise,” he warned.
He explained how inexperienced investors taking high risks are most likely to lose capital.
“Watch, learn and practice before investing any money.”
He recommended doing your research, gathering an understanding of how the stock market operates and learning key terms before jumping in.
2. Not doing your homework
According to the director, the need for research extends through to individual companies.
“Some investors don’t spend enough time doing their research on some of the businesses they invest in.”
By researching particular sectors and trends, you’ll gain insight into what companies are generating value, and those you should steer clear of, Mr Francis offered.
And for those investors who can’t commit to ongoing research, “then copying someone else who does may be the better route for you”.
3. Investing more than you can afford
Mr Francis reminded potential investors that the stock market is not a get-rich-quick scheme.
“Investors should adopt a long-term investment mindset and only invest what they can afford to lose if markets don’t perform as you had anticipated.”
High-risk mindsets held by inexperienced investors can result in losses, the director reminded.
This is especially so in the global pandemic, with markets having been extremely volatile.
About the author
About the author
Stock market
‘Skinny rally’ can’t continue: Bell
Bell Asset Management CIO Ned Bell believes that market darling large-cap companies are in for a reckoning as the global economy reopens for business. ...Read more
Stock market
Vaccine rollout to boost underperforming stock in 2021
The rollout of the COVID-19 vaccine is tipped to be a greater stimulus than the massive fiscal response, with shares that have underperformed during the pandemic set to soar in 2021, an industry exper...Read more
Stock market
US lawmakers quiz key GameStop players
Notorious retail investor Keith Gill is facing a grilling from the US congress and the possibility of a class action lawsuit due to his alleged part in the GameStop saga, with policymakers convinced h...Read more
Stock market
Facebook’s news ban feared to have implications for the sharemarket
Facebook’s move to restrict the sharing and viewing of news in Australia could have huge implications for the sharemarket, an expert has said, as Treasurer Josh Frydenberg readies himself for anothe...Read more
Stock market
Stock market bubble fears overblown: Vanguard
Fears of a stock market bubble are “overblown” despite equity markets around the world closing in on all-time highs, an industry analyst states. ...Read more
Stock market
Experts blast Treasurer’s plan to permanently ease disclosure laws
Sharemarket disclosure laws could be permanently relaxed as the Treasurer looks to shield businesses from disgruntled shareholders, but legal experts have labelled Frydenberg’s reasoning “madness...Read more
Stock market
Is your portfolio climate change ready?
The vast majority of investors believe climate change will have an impact on their portfolio, yet not all investors are readying their asset allocation to take advantage of a net zero world, new resea...Read more
Stock market
Sharemarket penalises mining firms abusing human rights
The sharemarket has been a powerful tool in holding to account mining companies engaged in human rights violations, but informational campaigns by civil society groups and the media are the real aware...Read more
Stock market
‘Skinny rally’ can’t continue: Bell
Bell Asset Management CIO Ned Bell believes that market darling large-cap companies are in for a reckoning as the global economy reopens for business. ...Read more
Stock market
Vaccine rollout to boost underperforming stock in 2021
The rollout of the COVID-19 vaccine is tipped to be a greater stimulus than the massive fiscal response, with shares that have underperformed during the pandemic set to soar in 2021, an industry exper...Read more
Stock market
US lawmakers quiz key GameStop players
Notorious retail investor Keith Gill is facing a grilling from the US congress and the possibility of a class action lawsuit due to his alleged part in the GameStop saga, with policymakers convinced h...Read more
Stock market
Facebook’s news ban feared to have implications for the sharemarket
Facebook’s move to restrict the sharing and viewing of news in Australia could have huge implications for the sharemarket, an expert has said, as Treasurer Josh Frydenberg readies himself for anothe...Read more
Stock market
Stock market bubble fears overblown: Vanguard
Fears of a stock market bubble are “overblown” despite equity markets around the world closing in on all-time highs, an industry analyst states. ...Read more
Stock market
Experts blast Treasurer’s plan to permanently ease disclosure laws
Sharemarket disclosure laws could be permanently relaxed as the Treasurer looks to shield businesses from disgruntled shareholders, but legal experts have labelled Frydenberg’s reasoning “madness...Read more
Stock market
Is your portfolio climate change ready?
The vast majority of investors believe climate change will have an impact on their portfolio, yet not all investors are readying their asset allocation to take advantage of a net zero world, new resea...Read more
Stock market
Sharemarket penalises mining firms abusing human rights
The sharemarket has been a powerful tool in holding to account mining companies engaged in human rights violations, but informational campaigns by civil society groups and the media are the real aware...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
