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How to avoid investing mistakes that retail investors often make?

A joke about investing in the stock markets goes like this: I figured out how to make a million dollars on the stock market. Invest two million.

Experts share their advice on how investors with just a little bit of self – knowledge and discipline can navigate the equity shoals safely.


There is a phenomenon called the 'behaviour gap' in investing, and it tends to come about because equity returns are nonlinear, says Aniruddha Bose, CBO, FinEdge.

Some examples of mistakes that prevent you from earning good returns include trying to time the market by buying low and selling high, fence sitting, stopping their SIP’s during market crashes

As a result of these emotions, investors rarely end up earning the actual published returns from the stocks they buy into, which is sad but avoidable.

Bose has a few suggestions: First, align your investments to clearly defined goals. This will broaden your investing outlook and will eliminate a lot of the behavioural pitfalls.

Then get an understanding of the interplay of risk & reward. You must know what to expect while investing in equities as good returns come at the cost of volatility. 

It’s going to be a bumpy ride, and in order to benefit, you have to be prepared to see your capital in the red for extended phases without jumping the gun


Finally, do not look at your portfolio too often or in other words avoid portfolio churn.

Click here to know more about the investing mistakes. 

Check here for more personal finance-related stories. 

How to avoid investing mistakes that retail investors make?

Retail investors should focus on aligning their investments with clearly defined financial goals, understand risk and reward, avoid portfolio churn, and seek the help of a financial advisor or platform to make informed decisions.

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How to avoid investing mistakes that retail investors make?

Retail investors should focus on aligning their investments with clearly defined financial goals, understand risk and reward, avoid portfolio churn, and seek the help of a financial advisor or platform to make informed decisions.

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