David Ebrahimzadeh Investment Advice for Young Investors

When you’re just getting started as an investor, it can be hard not to make mistakes. After all, you’re trying to learn as much as you can. But, according to David Ebrahimzadeh, there are some mistakes that new investors make that can seriously hurt their prospects in the long run. While it might seem like a small thing, these mistakes can have a big impact on your investing future. Here is Ebrahimzadeh's view on what are the top mistakes new investors make.

Not investing in a stock that you understand

As mentioned earlier, one of the biggest mistakes new investors make is not investing in stocks they understand. When you first start investing, you might hear a lot of advice that seems to contradict itself. If you don’t understand what’s going on behind the scenes, it can be easy to be misled. The best way to avoid this is to take a long-term approach. Start by researching a company’s history. Invest in stocks that you understand, because as you get to know them better, you’re going to be able to make better investment decisions.

Investing in a stock based on a hot tip

The best tip for new investors is to not trust hot tips. Hot tips are pieces of advice that are going around on the internet but have no real merit behind them. If someone on Twitter is saying “A stock is on its way up!” there’s no real reason to trust that. You need to do your own research to find out if it’s likely to be true. If you hear a tip that sounds like it might have merit, make sure you do your own research to back it up. You might be surprised to find out that it isn’t actually true.

Focusing on just a few stocks

As you get into investing, you’re going to hear a lot of advice that focuses on a few stocks. Most financial advisors will tell you to diversify your portfolio. But, when you start out, you need to narrow your focus. After all, you don’t know much about investing yet. If you diversify your portfolio, you’re going to end up spreading yourself too thin. You should only invest in a handful of stocks, which you should research thoroughly. You don’t want to over-invest in a few stocks, but you also don’t want to under-invest in them.

Not researching your investments

Investors always like to hear that their investment is growing. But, what happens if the company you’re invested in goes bankrupt? You’ll lose all your money. So, you need to research your investments. There are a lot of record-keeping rules that you need to follow. You need to keep records of when you buy and sell a stock. You also need to keep records of when you borrow money from a broker. If you don’t keep records, you can get into serious trouble.

Not diversifying your portfolio

Investing in many different stocks is a great way to diversify your portfolio. Which stock is going to go bankrupt? Which company is going to make bad decisions in the future? You need to be diversified, so you need to invest in many different stocks. But, don’t just have all your eggs in one basket. You should have a healthy mix of stocks in different industries. You need to spread your investments out, but you also need to understand each one thoroughly.

Over believing a company’s growth numbers

One thing that new investors often do is over-believe a company’s growth numbers. A lot of times, companies will hype up their growth numbers to attract investors. In reality, a lot of those numbers aren’t actually true. Companies will often hype their numbers to attract investors, so it’s essential to do your own research to verify their numbers.

Just because it’s on the list doesn’t mean you should avoid it

There are a lot of stocks that are on the “worst stocks to buy” lists. These are companies that are often considered dead investments. There are also a lot of companies that are on the “best stocks to buy” lists. These are actually good investments, but people don’t like them because they’re too popular. You need to find your own path in finding the best stocks to buy. It’s easy to fall into the trap of avoiding stocks just because they’re on one of the lists. Instead, you need to use the lists as a guide to finding new investments.

Conclusion

There are plenty of mistakes new investors make. From not researching your investments to just believing a company’s growth numbers, there’s a lot you can do to improve your investing success. When you’re just getting started, it’s easy to make mistakes. It’s only when you’ve been investing for a while that you’ll start to make more earnings. When you’re just getting started, it’s important to focus on the basics. Invest in stocks that you understand, research your investments, and diversify your portfolio to avoid the top mistakes new investors make.