There’s something about capital markets that captivates everyone: Some think stocks are an easy way to make a quick score. Others, on other hand, liken stock to gambling.
And then there are some who just don’t have a clue about stocks at all.
(Fret not, #WealthGANG, we’re here to serve!)
But why is the stock market so fascinating? What causes people to be completely overawed by it?
Despite the many myths, it is extremely easy to trade in the markets; you can actually get started on your smartphone for less than $10.
For all the myths, biases, (mis)beliefs and misconceptions, you can still hedge your bets by following a disciplined blueprint. In this case here, we will share with you whatĀ notĀ to do.
Here are X common investor mistakes to avoid at all times.
Mistake #1: Thinking you can make a quick buck from Wall Street
This is probably the single biggest misconception about the stock market. Investor legends like Warren Buffett always maintain you need to invest over a long-term horizon to book big profits.
And even if you have stories like the ‘Teenage Bitcoin Millionaire,’ trust us on this one! They’re the exception, not the rule.
In other words, decision to enter the stock market’s based on an impulse. There’s no proper entry strategy and no exit strategy.
This is not how an investment decision should be made. Every investor should realize that investing in the stock market is a long-term playāit’s definitely NOT a get-rich-quick scheme.
āInvesting should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.ā
-Paul Samuelson
Mistake #3: Following the hot tip!Ā
Investors are all on the lookout for hot leads and stock market tips. But in reality, there arenāt any. This mistake is exactly how the “Wolf of Wall Street”got people onboard with his schemes.
Even if someone does have a hot tip, you have to watch out for human nature: People may skew positively towards stocks they ownāand negatively towards the ones they don’t.
The reality is this: There are qualified analysts who spend all day researching market trends and metrics.
Investment managers and brokers then share these analyses with premium clients. Much more credible info, yes. However even after receiving this analysis, there is no guarantee the investor will see an ROI.
Warren Buffett is a firm believer that investors can grow wealth by just replicating the indices instead of looking for multi-baggers and stocks that are expected to crush the market.
āIf stock market experts were so expert, they would be buying stock, not selling advice.ā
Norman Ralph Augustine
Mistake #4: “Buy/Sell Strategy”
This is probably the biggest misconception of all. Many investors, impulsively, end up buying a stock just because they see the price surging. (Again, think Bitcoin in December.)
As the price continue to climb, they’ll sell the stock and make a huge profit. The so-called Buy-Hold-Sell Strategy
If you do buy a stock, hold it for some time and then sell…you don’t have any guarantees the stock will rise.
A better playāaside from Buffett’s, obviouslyāis the borderline cliched “Buy Low/Sell High” strategy. In this strategy, an investor buys a stock on the downslide instead of when the price is rising.
All the investor has to do is hold the stock until a price correction occurs. If the stock is fundamentally strong, the price will increase. This will be the time to sell it off and earn a profit.
āI will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” āĀ Warren BuffettĀ
Mistake #5: No clear investment objective
Every investor should define, clearly, what his or her investment goals are.
The rule of thumb of investing is the higher the risk, the higher the return. So if the market return is less, thenāneedless to sayāthe risk involved is deemed less.
There are two forms of securities, generally: Stocks (equity) and bonds (debt).
Stocks
Equity stocks tend to have higher risks associated with them. However, there is a tremendous potential to earn capital gains from equity sharesābut with the caveat that you should be prepared to lose your investment
Bonds
Bonds and fixed income instruments are relatively less risky than equity shares. They offer periodic returns in the form of interest but are still prone to market risk.
A short-term investor looking for minimal risk is better off buying treasury bills and government securities.
āYou get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” ā Peter Lynch
I was looking around Google for an old article on tax strategies and this five-year old video of myself happened to pop up.
Iām interviewing a tax expert about how real estate investors avoid paying taxesin perpetuityāAND how everyday citizens can do the same thing.
(Real estateāour TEMPLE I and TEMPLE II projects includedāhas a number of tax benefits savvy investors have capitalized on for years, including Opportunity Zone breaks and 10-year tax abatements.)
Thereās the 1031 exchange, of course, which Iāve shared with you guys before.
Just to refresh your memory, the 1031 Exchange allows you to roll over gains from your last project into a new property TAX FREEāas long as said property is worth the same or more.
But thereās ANOTHER TAX LOOPHOLE that can take your portfolio to an entirely new level by splitting your capital gains into MULTIPLE properties.
PS: In our next update, Iām going to break down how real estate moguls get paid from their propertiesā¦tax free. š PPS: If you want to learn how to implement generational wealth strategies like this one, you can join our NYCE wealth academy (TRIBE U) here.
If thereās anything the pandemic taught us, itās that the paradigm of āofficeā and āworkspaceā has been shaken to its CORE.
Universities are teaching via Zoom, court dates are done virtually, FULLY REMOTE businesses are valued at $1B+, and legitimate Inc. 5000 startups are run fromā¦wherever. š²
This is my office for the dayā¦
I am actually running our business from the beach, typing this from here.
Itās 4:28 pm CET, which means itās 10:28 am EST and I am CRUSHING my to-do list.
(And the team will continue to crush it while Iām asleep. Thatās the š)
Having team members in all the main time zones gives us a 24-hour work cycle vs. 9-5/eight-hour on-the-clock performance.
This means we get 3x the productivity of a similar company. š„
Let me repeat thatā¦3x PRODUCTIVITY vs. our competitors.
Meanwhile our project management software grants us 24-hour TEAM-WIDE connectivity that tracks all tasks and lets us know if productivity dips even a little bit.
There is ALWAYS someone senior awake. It could be Martin in Barcelonaā¦Nat in New Yorkā¦Vineet & Arif in New Delhi.
Well, the first step is to have an actual side hustle youāre launching. Not just an idea, a validated business.
MAJOR KEY: Do NOT spend money until youāve made your FIRST DOLLAR! šššš
(You can catch a replay Business Launch masterclass here and see TRIBE member Nessa launched her business on the spot and got her first $45K client shortly after.)
One of the easiest ways to start is with Airbnbāyou can start that in 10 minutes. Literally. (Hereās a guide if you need it.)
Once you have your business, you build a virtual infrastructure (you really just need two softwares, which are FREE), manage the team accordingly and run the business from there.
Iām gonna put together a step-by-step video breakdown this weekend inside the new TRIBE U on the FIVE key things you need to do this for YOURSELF. šµ š
From what software to use, how to build a team, how to keep.
In the meantime, drop a comment if youāre ready to build some wealth and any questions if you want moreā¦
Letās get to work. š
PS: If you canāt be bothered with video and just wanna get to work, weāre hosting a TRIBE U workshopthat will help you get this process started on the spot. Itās $479 $49. š„
But what does it all really mean? How does it come together? In this week’s chart, our friends at CB Insights break down exactly how blockchain powers Bitcoin.
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