Seven Moves To Make If You Want To Lose Money

Seven Moves To Make If You Want To Lose Money

People find investing a scary prospect, but with a solid plan and good advice, anyone can do quite well. Just take a look at the most successful investors in the world, they all have similar traits.

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However, you still need to be aware of the potential investment mistakes that can cost you.

Below are seven mistakes you must avoid while investing.

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1. Being Emotionally Invested

The number one mistake people make is letting emotions guide them in making decisions. Investment decisions should be logical ones, not ones based on emotion. Emotions can cause you to invest in the wrong stocks, invest at the wrong times and sell at the wrong times.

Emotions are not wired the same way as logic. Under the ruling of emotions, you can become fearful at an economic downturn and sell when the tumultuous moment will pass. Giddiness at your early successes can urge you to take unnecessary risks that will, undoubtedly, cost you money.

Logic will tell you to buy a stock that hits bottom, stay invested even in the bad years, and reinvest in a variety of things you may not completely understand, but are expected to emerge as a winning stock.

2. Not Planning Ahead

Another major mistake new investors make is not having a plan first. Without a plan, you will always be buying when you should be selling. You are too aggressive and trade too quickly.

A plan should focus on both your short-term and long-term goals. It should include both an exit strategy and a plan to enter back into the market. It should also include how you want to either expand your investments or scale back as you grow older.

3. Trading Too Often

Investing can be addictive and those who make a few excellent choices, especially early on, feel they can keep that run going. However, trading too often actually loses money because of investment fees and the risk of trading and selling at the wrong times.

Along with that, experts advise not to chase a trend. A lot of new investors want to hop on the next big thing. That may end in a bust, like the dot coms or tech or that doesn’t get off the ground (see: Bitcoin: Fake Gold for Millennials). Be sure to research companies before investing and choose companies you can stick with for the long term.

4. Having Unrealistic Expectations

Investing is a long-term venture, but some people think they should see dramatic results now. That attitude leads to many of the other problems like trading too often and letting fear rule your choices.

Typically, the result is they sell when the market tanks out and buy when it is on the rise. Smart investors do the opposite, buy when it’s low and sell when it’s high.

For most investments, it takes between five and 20 years to see a return. You will not be rich overnight. You must be patient and understand the market can go up and down many times in that time frame.

5. Paying Expensive Consultant Fees

Some new investors think that getting the best advice comes at a premium price. That is simply not true.

In fact, many investment experts say to go to the broker with the cheapest rates. They still offer knowledge to help you pick your investments, but you save money in the end.

6. Investing Without Keep Cash on Hand

Many people, in their quest to be rich, invest with everything they have. That is not a good idea.

You should have savings to last you at least six months and it’s a requirement to pay off all your debts before you invest. Also, your savings should be able to be accessed easily, in case of an emergency.

Having cash on hand means you won’t be forced to sell your investments. A forced sell usually means a loss for the seller, either out of bad timing or because the investments weren’t allowed to grow.

Having cash on hand and debt paid off will not only give you more money to invest, but will also give you peace of mind. That means there is less chance of you relying on your emotions.

7. Creating an Unbalanced Portfolio

Some new investors are way too aggressive in their investments, while others invest solely in low-interest CD’s or bonds. The smart choice is to have a diversified portfolio with some aggressive stocks and some conservative long-range options like bonds or precious metals.

Today, there are even options to diversify your retirement portfolio, through a self-directed IRA where you can invest in gold and silver. These precious metals IRA companies provide services to help rollover your existing plan into a self-directed IRA to give you greater control of your asset allocation.

Most advise you invest more conservatively as you grow older with only 10 percent in aggressive stocks as you reach retirement age. Younger people can start out with as much as 80 percent in aggressive stocks.


Knowing what the risks are, doing research and understanding how to achieve your goals are some of the ways you can make investing work for you. The key is patience. It takes years for investments to pay off. Then, you will see the fruits of your labor.

About the Author:

David Warren is the senior writer and lead researcher at HardStacks. He has been a financial engineer for over 30 years and has been investing in alternative assets since the Great Recession of 2008. He has a true passion for learning about economic cycles and educating others on how to protect and grow their wealth by investing in precious metals, real estate and cryptocurrencies. Follow him on Facebook.

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Ben Graham, the father of value investing, wasn’t born in this century. Nor was he born in the last century. Benjamin Graham – born Benjamin Grossbaum – was born in London, England in 1894. He published the value investing bible Security Analysis in 1934, which was followed by the value investing New Testament The Intelligent Investor in 1949. Warren Buffett, the value investing messiah and Graham’s most famous and successful disciple, was born in 1930 and attended Graham’s classes at Columbia in 1950-51. And the not-so-prodigal son Charlie Munger even has Warren beat by six years – he was born in 1924. I’m not trying to give a history lesson here, but I find these dates very interesting. Value investing is an old strategy. It’s been around for a long time, long before the Capital Asset Pricing Model, long before the Black-Scholes Model, long before CLO’s, long before the founders of today’s hottest high-tech IPOs were even born. And yet people have very short term memories. Once a bull market gets some legs in it, the quest to get “the most money as quickly as possible” causes prices to get bid up. Human nature kicks in and dollar signs start appearing in people’s eyes. New methodologies are touted and fundamental principles are left in the rear view mirror. “Today is always the dawning of a new age. Things are different than they were yesterday. The world is changing and we must adapt.” Yes, all very true statements but the new and “fool-proof” methods and strategies and overleveraging and excess risk-taking only work when the economic environmental conditions allow them to work. Using the latest “fool-proof” investment strategy is like running around a thunderstorm with a lightning rod in your hand: if you’re unharmed after a while then it might seem like you’ve developed a method to avoid getting struck by lightning – but sooner or later you will get hit. And yet value investors are for the most part immune to the thunder and lightning. This isn’t at all to say that value investors never lose money, go bust, or suffer during recessions. However, by sticking to fundamentals and avoiding excessive risk-taking (i.e. dumb decisions), the collective value investor class seems to have much fewer examples of the spectacular crash-and-burn cases that often are found with investors’ who employ different strategies. As a result, value investors have historically outperformed other types of investors over the long term. And there is plenty of empirical evidence to back this up. Check this and this and this and this out. In fact, since 1926 value stocks have outperformed growth stocks by an average of four percentage points annually, according to the authoritative index compiled by finance professors Eugene Fama of the University of Chicago and Kenneth French of Dartmouth College. So, the value investing philosophy has endured for over 80 years and is the most consistently successful strategy that can be applied. And while hot stocks, over-leveraged portfolios, and the newest complicated financial strategies will come and go, making many wishful investors rich very quick and poor even quicker, value investing will quietly continue to help its adherents fatten their wallets. It will always endure and will always remain classically in fashion. In other words, value investing is vintage. Which explains half of this website’s name. As for the value part? The intention of this site is to explain, discuss, ask, learn, teach, and debate those topics and questions that I’ve always been most interested in, and hopefully that you’re most curious about, too. This includes: What is value investing? Value investing strategies Stock picks Company reviews Basic financial concepts Investor profiles Investment ideas Current events Economics Behavioral finance And, ultimately, ways to become a better investor I want to note the importance of the way I use value here. It’s not the simplistic definition of “low P/E” stocks that some financial services lazily use to classify investors, which the word “value” has recently morphed into meaning. To me, value investing equates to the term “Intelligent Investing,” as described by Ben Graham. Intelligent investing involves analyzing a company’s fundamentals and can be characterized by an intense focus on a stock’s price, it’s intrinsic value, and the very important ratio between the two. This is value investing as the term was originally meant to be used decades ago, and is the only way it should be used today. So without much further ado, it’s my very good honor to meet you and you may call me…

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