SA���ʴ�ı

Human beings rarely act rationally and this also applies to investing. Private investors in particular are influenced on the stock markets by their own motives, attitudes and assessments, as well as by their personal perceptions and how they process information.

Experts refer to this as “behavioral finance”. They emphasize that these cognitive distortions usually happen subconsciously and often end in investment errors.

For example, investors only buy after stock market prices have risen continuously for a long time and therefore do not benefit from most of the price gains. Or they sell their investments at a loss during a crisis, just before the market bottoms out, before the recovery sets in.

Great opportunities, but also many risks, await investors on the stock market. Mistakes can have an immediate negative impact on your investment success. Six typical mistakes made by investors are:

1. Overestimating your abilities as an investor

Imagine you are buying a stock that is trending upwards. The price keeps going up and you feel justified in your decision to buy. At the same time, you ignore the fact that this stock may only be benefiting from positive stock market momentum.

People like to attribute successes to their own abilities and blame external circumstances for failures. This can lead investors to overestimate their own abilities based on random successes.

Because of this overconfidence, they often develop an excessive faith in their investments and take on greater risks, such as by making larger bets.

2. Developing an emotional attachment to your investments

Investors often become emotionally attached to their investments, which can significantly influence their investment decisions.

Suppose you have a strong connection to a particular car or fashion brand and therefore hold shares in that company in your securities portfolio. And although financial markets have been on an upward trend for some time, the current price of your shares is far below the original purchase price.

But you hold on to the securities anyway. Why? Because you are emotionally trapped, you ignore the potential for loss and miss out on the chance to invest in securities with better potential returns.

3. Following the crowd

Every day we are influenced by the behavior of others. You are standing at the pedestrian crossing and the traffic light is red – but everyone crosses the street anyway. Will you join the herd?

This herd instinct does not stop at the financial markets. Only a few investors are conscious of this. For example, if the price of a stock rises, you want to be involved (“fear of missing out”) and benefit from the increase.

But you often buy the share at too high a price because you missed the right moment. The situation is no different when it comes to sharply falling stock market prices: Once general confidence has evaporated, people are more likely to sell, often prematurely – and often at a considerable loss.

4. Holding on to poorly performing investments for fear of loss

Fear of loss or loss aversion is one of the most widespread patterns of behavior among investors. Most people weigh a loss more heavily than a gain of the same amount. This can lead to making the wrong decisions for your own investment strategy and long-term goals.

Loss aversion manifests itself, for example, when investors hold stocks at a loss because they are hoping the price will recover. Selling the securities makes the loss feel real. They therefore avoid selling rather than accepting the loss.

5. Chasing short-term gains

The well-known stock market and financial expert André Kostolany put it succinctly: “I can’t tell you how to get rich quick. But I can tell you how to get poor quick: namely by trying to get rich quick.”

Investors who often achieve short-term gains frequently lose sight of their long-term investment goals. As a result, they take excessive risks in pursuit of a quick profit.

Impatience has another disadvantage, which is that those seeking to get rich quick tend to make poor investment decisions or invest at the wrong time. And the more securities you buy, hold for a short time and sell again, the higher your transaction costs, which in turn reduces your return. You may miss out on higher returns if you sell shares too soon.

6. Putting all your eggs in one basket

Another common investment mistake is lack of diversification – when investors concentrate their capital on individual stocks, sectors or asset classes. If you put all your eggs in one basket, you are taking an unnecessarily high risk.

Let’s imagine you invest a large part of your assets in shares in a single company or industry, such as technology or energy. If this company or the entire sector performs negatively, your portfolio can lose a lot of value.

Many investors underestimate this risk, especially if they had a good experience with a particular investment before. Positive developments in the past tempt people to bet even more heavily on the same stock or market. But even very successful companies or industries can be subject to unexpected fluctuations.

Follow your own investment strategy long term: Your investment strategy is your compass, especially when markets are turbulent and emotions quickly take over. A clear strategy makes it easier not to panic-sell during weak market phases or take too much risk out of excitement during strong phases.

Diversify your investments: A broadly diversified portfolio helps avoid cluster risk as your investments are spread across a large number of stocks and companies. You can often achieve a good level of diversification in an uncomplicated way with ETFs or broad fund solutions.

Question your investment decisions: As an investor, you should always ask yourself what the best investment for the future is, taking into account the latest information and your investment objective.

Regularly review and balance your portfolio: Even a well-planned investment strategy can become unbalanced over time. If individual investments rise or fall sharply, the risk structure of the portfolio automatically changes. By regularly reviewing and, if necessary rebalancing your portfolio, it can be brought back into line with your original strategy.