You’re probably familiar with the seven deadly sins – you know, sloth, greed, gluttony and so on. Deadly sins aren’t just bad for living – they’re bad for exchange traded fund (ETF) investing, too.
John at The Essentials of Trading and The Monevator pulled together a great list of sins to dodge, lest they destroy your portfolio.
- Hoping for quick money: While there are millions of investors who are successful at trading, they rarely got that way overnight. Trading success takes diligence and hard work.
- Looking back: Coulda, woulda, shoulda. It’s easy to look back and view things differently than how they really were. Don’t revise history, but do keep track of what you did, your thoughts while doing it and what you’ll do better next time. [5 Ways to Avoid Costly Investing Mistakes.]
- Forgetting details: Not paying attention to details, such as using the right type of order, can result in avoidable mistakes.
- Entry strategy: A lot of folks jump right into the market with two feet without taking any time to think through what they’re doing. Understand what you’re doing. You can research ETFs by visiting Education Central. Many investors have learned the hard way: not getting educated costs a lot.
- Fixating on winning: New traders are often overly confident in their ability to play in the markets. Temper your expectations and proceed with caution.
- Ignoring risk: Even the safest investments have risks. First decide what level of risk you’re comfortable with, then invest accordingly.
- Getting over excited: Celebrate and acknowledge your smart moves, but don’t take them as a signal to start getting cocky. Just keep doing what you did to become successful, and you may see more of the same. [How to Survive a Trendless Market.]
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.