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  • Writer's pictureScott Richter

Common investing mistakes – Part 1

Everyone’s an expert when it comes to investing, right? WRONG! Everyone thinks they’re an expert, but I guarantee, every expert has made their fair share of mistakes. There’s just no avoiding it. Even I hit a major slump recently (which I’ve since turned around), so even I’m subject to error, and lots of it. Look, everyone makes investing mistakes, but with these tips, you’ll be able to avoid the big ones. I’m talking here about putting absolute trust in financial advisors, following only mainstream financial media, and obsessing over missed opportunities, all three of which I’ll elaborate upon here with you today.

I know I always tell you that I’m personally not a financial advisor, so you should take my information with a grain of salt. But that doesn’t mean that actual financial advisors operate completely without error! They’re human, after all, and humans make mistakes, so you shouldn’t just blindly follow someone because they call themself a ‘financial advisor.’ Most important to consider, financial advisors are running their own businesses, so they’re paying attention to their own profits too, and as such, their priorities don’t always line up with yours. Many of them are dealing with investors like you in bulk – they simply have to. With this in mind, you should try to find in an advisor that is an actual ‘fiduciary,’ held to a higher regulatory standard than just a regular ‘broker,’ even if it means they might not profit as much in the short term. Trustworthiness is always worth it in the long term.

And speaking of trustworthiness, far too many investors have total and complete (but misplaced) trust in mainstream financial media. CNBC doesn’t have all the answers! The Dow and the S&P aren’t the only things that matter! The first one is only made up of 30 stocks, and the second contains only 500. Sure, the information they offer is valuable, but they aren’t the be-all, end-all. Sectors like aerospace or tech often move up or down independent of what’s happening with the Dow and the S&P, so it’s more important to follow the trends of the sectors you’re invested in than it is to listen exclusively to the words of Jim Cramer.

Trust me on this: Even if you listen to someone like that on absolutely everything, you’re still going to miss some big opportunities. And frankly, even if you don’t listen to someone like that, you’re also going to miss some big opportunities. There’s no way around this. Nobody bats 1,000 in options trading. And so, that brings me to the last mistake of the day: Don’t obsess over every opportunity you miss! Do you know how much a single Bitcoin cost when I first heard about the technology? 12 cents. That’s right, 12 cents. If I would have invested just $10,000 in Bitcoin back then, I would literally be a billionaire today. And I could have done that! I had the money, and I had the opportunity. But who the hell knew BTC would be up above $50,000 today? Nobody. If lots of people knew this, then lots of people would be billionaires today from Bitcoin, but only a few actually are. Do I think about this sometimes? Sure. But do I obsess over it? Of course not. I let these things go, and instead try to focus on the next big thing, the next money-making opportunity. And as such, I’ve done quite well with many other investments outside of cryptocurrency.

And it’s truly my belief that, if you too take advice from financial advisors in stride, and if you look to other sources of financial information besides just mainstream media, and if you let the missed opportunities go, and not haunt every trade you make (as well as avoid other common mistakes, which I’ll surely discuss in a future blog post), then you can succeed, too. Patience and determination, Money Makers! That’s how we’re all going to keep on keeping on!

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