8 Mistakes Investors Make

1) Not Doing Research

Oftentimes we will listen to what our friends tell us. Bad idea. You must always do your research on your own before making an investment.

2) Messing with Penny Stocks

Sometimes penny stocks look like good investments, because they appear so cheap. But remember - there is probably a reason that they are that cheap. This is not to say that money can't be made with penny stocks....but be careful. A six-cent stock can go to two cents just as quickly as ten cents.

3) Fear During the Bad Times

Economies move in cycles. If you sell during the bad times, you will often miss the big upswings in the market that occur on the way to the good times. So it pays off to stay invested, even if things aren't looking good.

4) Investing Blindly

Similar to number one, people often invest on a whim after a tip from a friend or a broker or an expert on TV. Again, do your own research first. It is your retirement you're investing for.

5) Not Researching Enough

It seems that sometimes people will stop following their investments once they purchase them. This is a horrible mistake. This is the time to follow them the closest. So make sure to dedicate a few hours each week to staying on top of your investments.

6) Selling Winners

It is good to take some off the table after you've made a profit. But what you don't want to do is sell a winner to pick a loser. Unless you have sound research that supports the move - don't do it. Stay with the winners.

7) Trading too Often

People often succumb to trading too much. Either they second-guess their decisions and get too scared, or they find something better a week later. There are many downsides to trading too often. The commission fees add up. The tax implications hurt you. And the decisions are often not as good as the original investments.

8) Thinking the Stock is as Good as the Product

A company's stock is not always correlated with its products or services. Remember that. Tivo is a great product, but a horrible stock. Again, doing your research will help you not fall into this trap of thinking.

In order to make the most money and prepare for your retirement, make the least amount of mistakes as possible. Hopefully this list has awaken you to some things that you are doing that may be hurting your overall performance.

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