Common Mistakes In Stock Investing

Most stock investors (it can be as high as 90%) are not making money from the stock market, mainly due to common mistakes being made day in day out, year in year out as history tends to repeat itself.

These common mistakes are due to possession of unpractical mindset which is not applicable in the stock market. Let me list down, in brief, some common mistakes in these groupings below.

Stock Selection

• Not buying an Uptrend stock in an Uptrend sector, e.g. Ignore YTL and YTLPowr in Oct 2023 in the Utilities sector.

• Ignoring a stock with increasing quarterly revenue and profits, in other words, overlooking a stock with future potential.

Entry Point

• Feeling scared on a stock which keeps breaking new high, e.g. IJM in May 2024.

• Buying a stock which is in the Downtrend with less future potential, e.g. TopGlov.

• Slow in reacting to a change of trend from a Downtrend to an Uptrend.

• Emotionally buy on news without checking its mid-long term potential.

• Falling in love with penny stocks.

Adding to Winning Position

• Not adding extra position during a winning run. Not sure what technique should be used.

• Not letting a Profit to run its full course. E.g. Taking full profit when it reached 5% and the stock keep moving up for the next 6 months.

• Don't have a re-entry strategy when a particular stock continues its Uptrend.

Exit Point

• Not setting price alert for stocks under portfolio.

• Slow in reacting to a change of trend from an Uptrend to a Downtrend.

• Don't have a cut lost strategy. 5% lost or RM 0.10 lost is an ideal cut lost point.