5 Investing Mistakes You Should Never Make in 2022
Investing is an integral part of the financial planning process and if done correctly can play a big role in the achievement of your goals. The timing of the investment, the instruments in which you invest, the duration for which you invest, and its continuous review are important for attaining the desired results. Here we talk about some common investing mistakes that you should avoid in your investment journey.
- Delaying Savings and Investments for a later date
The biggest mistake to avoid is to delay savings and investments to a later day. While you should enjoy the luxuries of life, you should not forget that emergencies can come any time and empty your pockets. So, savings are a must from the day you start working. And the earlier you start, the faster you will be able to attain your financial goals. An early start will also help you benefit from compounding besides aiding in wealth creation. You can use a compounding calculator to find out the size of the corpus that you can build by investing in a particular instrument at a particular time.
- Not Being Disciplined
To achieve your dreams and financial goals, you have to be disciplined. This means you need to keep aside a proportion of your income as savings and invest it diligently. If you choose to be erratic in your investments and savings you will find it difficult to achieve your goals on time. One way to avoid this mistake is to start a SIP or Systematic Investment Plan wherein you commit to investing a specific amount for a pre-decided period. You can even connect this SIP to your bank account so that the investment amount is transferred from your account automatically thereby ensuring that you do not forget or miss the payment at any time.
- Not Exploring Rewarding options like mutual funds
A major investing mistake made by investors is to park their funds in low-risk investments like fixed deposits and public provident fund schemes. They are afraid of investing in equities and mutual funds due to the risks arising out of the stock market volatility. This mistake can not only restrict their returns but also delay the achievement of important financial goals. Avoid this mistake by studying the advantages of investing in mutual funds for the achievement of their retirement or child education or any other financial goals. Mutual funds offer a lot of investment opportunities for investors with different risk appetites and investment goals.
- Believing that investments require Large Amounts
A common mistake that people make is believing that they can invest only large amounts. Waiting to save large amounts before investing is a wrong strategy. Investors can opt for the SIP route and start investing with an amount as low as Rs 500. SIP investing makes an investor disciplined inn spending and saving both.
- Investing randomly without any research
One mistake that many investors make is to invest in random schemes and plans without understanding their working and goals. Don’t make your investments based on hearsay. Instead, do some research, check the past performance of the investment option or plan selected by you, the track record of the fund managers, and ensure that its goal and risk profile match your requirements. Again, investment decisions should not be based on emotions but logic and thorough research.
Avoid these common mistakes and enjoy a fruitful investment experience. Make use of online tools like a SIP calculator and compounding calculator to make wise and informed decisions.
