INVESTING MISTAKES TO AVOID

Why do we make poor investment decisions and how to avoid them

Investing has come to mean a flurry of activity. One must go about acting with assumed expertise, buying, selling, booking profits, revising and reworking. Keeping it simple and staid over the long term is boring in comparison. Poor investment decisionmaking is here to stay. We will crib about outcomes for a while, and then go back to doing the same things.

Own midcaps? Do a check & balance exercise to avoid decision of haste: 7 midcaps from different sectors with an upside potential of upto 49%

Every now and then the market goes through phases, where it prefers a certain set of stocks, not based on sector but based on the overall market cap. So, sometimes it is large caps, at other mid-caps. Now this partially happens, due to the flows which are coming to markets. For example, if more flows are coming to mid-cap or multicap schemes there is bound to be out performance in the mid-cap space. Now what it does is that it tends to create a sudden surge in mid-cap. Similarly when there is an outflow like the kind of one which we saw in March this year, midcap stocks tend to decline sharply. Essentially, it is the flows which impact the broader matrix of how midcaps behave. So there are phases not owning a midcap stocks appeared to sin and then there phase, where owning them appears to be sin. But if one focuses on the underlying business and some critical parameters, there is a possibility of getting rid of these phases of anxiety which keep coming to the street and create long term wealth.

India remains best market for long term alpha generation: Vikas Pershad

In some areas we were taking some profits. Defence was one of them. And we were adding to some of our other holdings, some in hospitals, healthcare broadly defined. Sanjiv mentioned a good point about IT services. There has not been a broad-based recovery in earnings in that sector yet. But I think investors are making a mistake by overlooking that sector.

Lesson for entrepreneurs: What are the common mistakes startup founders make and how to avoid them?

India has the third largest startup ecosystem in the world, with 1.17 lakh entities (DPIIT), nearly 1,710 venture capital funds, 794 accelerators and incubators (Tracxn), and several government initiatives like Startup India. Despite this fervour and support, financial and otherwise, the startup journey is extremely difficult.ET Wealth lists the typical mistakes most founders make and tell you how to tackle these

An investment advisor – A planner for your financial dreams

Globalisation, urbanisation, and technology have impacted the Indian lifestyle, blending tradition with modernity. The anticipated growth in Indian household wealth underscores the need for effective investment planning and wealth management.

Railways stocks: Stay bullish, just hedge a bit to avoid mistake of selling in haste: 7 outperforming railways stocks across different segments

Even the best of the rational brain can make wrong decisions when there is too much noise which gets created due to a narrative. Now for the last few days a narrative has been created that due to polls, FPI are selling. These kinds of narratives tend to hit the sector and stocks which are sitting with big gains and are dependent on government policy push. Railways was among the last sectors to get re-rated due to the policy focus. Whether it was companies which are financing the expansion of railways or private sector companies which are making coaches, all of them have done extremely well. Given the fact the railways is likely to be the focus area, the long term story remains intact. Only thing is that one might end up selling the long term winner early because of the narrative. Rather than getting jittery, it would be better to create a hedge and stay with the stocks where there has been a big change in the fundamental ways things operate and the sector has a long runway.

10 investment mistakes to avoid & make your portfolio ‘dent-proof’

“One should have liquidity when it comes to their portfolio for rainy days. Keep 6 months' worth of expenses parked in a separate basket of liquid funds,” says Chirag Muni.

Confirmation bias in investing: Why we never learn from our mistakes

Confirmation bias leads many to seek real estate and gold as preferred modes of investing. They do not want to look at any new information that disturbs their existing framework. Any argument about the limitations of these choices is likely to be ignored by them. Without an experience that is harmful for themselves, they tune out any information that goes against their preferences.

6 Daniel Kahneman principles to follow to avoid losing money

Daniel Kahneman, who passed away on 27 March at the age of 90, told us that our ability to make good decisions is not as easy as it appears. We rely too much on intuition for decisions that need deep and analytical thinking. Here are the six mistakes Kahneman points out that can help investors avoid big money losses.

Don’t follow, but take advantage of Mr Market's mistakes

The mid and small-cap stocks had a significant fall last week. Instead of speculating about what led to it and what triggered it, let us look at issues that will be more important from 1, 3, and 5 years from now.

Risks are of different kinds: The ‘market risk’ and ‘unnecessary self-created anxiety risks’; avoid the latter by checking little yet critical things

In a fortnight where smallcaps were the worst performers and large investors are counting on how much losses their smallcap portfolio have incurred. There are still some die-hard small fans who would be looking to invest in small caps and there is nothing wrong in investing in small caps even in mayhem if one is sure of holding it for the next three to five years. The only thing that needs to be ensured is that one should understand that there is a difference between a good business and a bad business even in the small, mid and largecap segments. There is a difference in the absolute value of the stock and the value of the company. There are some businesses that will remain small but are so niche that they will still make wealth for you if you hold them for some time. But if your definition of smallcap stocks is a stock that is quoting at below Rs 20 or an X amount and the reason you want to buy that stock is because you are hoping your money will grow by ten times, then forget small, mid or large, the stock market is not a place where you will make a return, the only thing you will get is unnecessary anxiety.

Tax planning for FY 2023-24: Last date is March 31, don’t make these mistakes

The tax-saving investments of an individual should be part of his overall financial plan. Poor financial habits and biased advice push taxpayers to make sub-optimal investment decisions. Here are some mistakes they must avoid in the rush to beat the 31 March deadline.

Own midcaps? It's neither a sin, nor a crime, just a mistake that can be rectified with checks and balances

A few weeks back, not owning a midcap stocks appeared to sin, but the way markets and specially the mid and smallcap stocks have declined, owning them would appear to be a crime today. But the fact is that neither it was a sin then, nor is it a crime today, it is just a mistake of getting focussed on narrative when the bulls are ruling the Street and getting absorbed in the post facto explanations which come when bears can be seen roaming on the Atreet. The solution probably lies in going back to the basics of investing.

Four mistakes investors might have made in 2023 & should avoid in 2024

Kaustubh Belapurkar says: "Investors need to think of two things when they invest in mid and small caps. One is have realistic expectations, right. Do not expect that what has happened in the past, delivering 35%, 40% returns is going to continue forever. That is definitely not going to be the case. And secondly, have an adequate time horizon."

5 financial mistakes young earners make

As you step into the spending and investing universe, you are likely to falter. Here are some missteps you should avoid.

Add quantitative checks to avoid mistakes: 5 smallcap stocks with upside potential of up to 52%

While it is a well known fact that small caps as a segment are more prone to risks of sharp decline. However, the reality is that when small caps are doing well, all the caution is thrown out of the window. The reason is, small gains also tend to gain very sharply in a short period of time and that is what makes them attractive to investors. Given the valuations, at this point of time, it would be logical that investors should put more checks and balances while navigating the small cap space. Also beware of rude shocks which this segment of the market may witness given the fact there are more headwinds ahead.ET screener powered by Refinitiv’s Stock Report Plus applies different algorithms & filters to all BSE and NSE stocks, and lists stocks which fulfill the various criteria as specified into the algorithms & filters to find those which might help navigate the stock market.

Avoid these financial mistakes if you want to retire early

You may want to invest all your liquid corpus in financial instruments in a hasty dash towards the FIRE target, but having a safety net is important to avoid derailing your financial goals.

5 mistakes to avoid while investing in real estate

4 common mistakes equity investors should avoid in a rising stock market

With stock indices close to their all-time highs, there is bullishness all around. Individuals tend to make their worst investing mistakes in such bullish times. Here are a few common investing mistakes that investors should avoid at this stage.

Career mistakes to avoid in your 30s and 40s

Career mistakes in mid-career years can put one's personal as well as professional growth on hold, decreasing chances of success. To help with this, individuals can learn from the mistakes of others. Mistakes to avoid include not pushing oneself to move up the ranks, fearing career change, placing money above everything else, not maintaining one's network, and underestimating one's value.

ITR filing: 8 mistakes to avoid in your income tax return

Many do-it-yourself tax filers end up making mistakes in their returns, leading to notices from the tax department. Here is a look at eight ITR filing mistakes you should avoid.

3 common mistakes to avoid while planning your investments in FY24

When I was young, I wish somebody had told me about the common mistakes that investors often make. Reviewing the strategy is a potential chance to learn and grow by watching what has derailed our efforts. As we enter FY 23-24, it is a great time to make a resolution to avoid these common mistakes and stay aligned with our financial goals.

Optimise benefits from tax loss harvesting by avoiding these common mistakes

Investors with large equity or mutual fund portfolios can pay low or no tax or set-off their losses by tax harvesting or tax-loss harvesting.