Common Mistakes To Avoid When Investing In Stocks Markets

1. Consider only company fundamentals and ignore market risks (Political risk, Natural disasters, and government conflicts).

2. Pick a “CHEAP” price share (below RM 1 Share) not its value and without looking P/E (Price to Earning) ratio or whether stocks Over valued or Undervalued.

3. A bullish stock market is breeding ground for mistake. Let’s say, the banking sector P/E ratio historically trades at 14 to 15 times. In bull market, can shoot up and hit 20 times P/E ratio. If you are emotional, you will lose track of fundamental (value) and buy at high price.

4. Investing base on “Rumors” which can be partly true or false and “Speculation” without research on company fundamentals are very dangerous.

5. Lack of monitoring and strategies are also a very common mistake. Malaysia stock market is unlike US stock market. If you buy a stock and would keep for few years later and expected the stock rising without consistent monitoring may exposure to even higher risk.