What are the common mistakes that individual investors make while taking an investment decision?
There are several psychological mistakes commonly made by investors. Most investors in India believe that the par value fund or Rs10 net asset value (NAV) fund is much better then a fund with a higher NAV of Rs75 or Rs100. This is simply the biggest fallacy of investor thinking. Another common mistake is that investors run away from the markets when some bearishness sets in and only start investing once a full blown rally starts peaking, totally forgetting the golden investor rule of “buy low, sell high”. Some other mistakes pertain to falling in for the marketing blitz of NFOs and not investing in existing good performing equity schemes. But the biggest mistakes are made when investors pay little or absolutely no attention to where they are investing instead preferring to spend massive amounts of time buying small household items like TV, refrigerator and pressure cooker. This leads to untold damage to investor wealth over the long-term. With so many MFs offering similar schemes how s
