- Lack of a strategy
When making an investment write down the reasons why you are placing your hard earned cash in the hands of CEOs that you have never met. It is important to be clear why you are entering an investment, when you plan to exit the investment and any factors that may cause you to rethink your initial strategy.
- Not cutting Loses
Crystallising a loss is notoriously difficult for inexperienced and unseasoned investors. There are graveyards full of investors that were unable to manage the downside risk of their portfolios and racked up heavy losses as a result. The hope that a share price will rebound is all too much for many investors as they watch a bad position become increasingly worse. Having a system in place to stop losers in their track is imperative.
