Some Other Investing Mistakes
The following are some of the other classic mistakes investors make when they let their fear or greed overrule their plan:
Hot tips. Acting on hot tips is almost always a recipe for overpaying. By the time you hear about a “hot tip,” the professional traders have bought and sold the stock and made their profit. You will buy at the top of an inflated price that will almost certainly fall well below what you paid.
Forgetting trading costs. It’s easy to forget that it costs money now and in the future to make a profit on a stock trade. In the present, there is a commission to pay; in the future, you will pay a commission when you sell and taxes on any profits. Which taxes you pay will depend on how long you held the ...