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10 Ways to Lose Money Investing in Stocks

Here are 10 ways to increase your chances of becoming a poor investor in the stock market. Follow these rules and you’ll be on your way to negative returns for the year.   The last thing you’ll have to worry about is capital gains.
 
1. Chase stock performance. When your stocks are not currently doing well, sell them and chase those stocks that are currently experiencing huge gains.  Since various studies have shown this is the biggest sin investors make, doing this will greatly increase your odds of losing money.  In other words, buy high and sell low. 
 
2. Try to save your bad investments by averaging down. 
 
3. Always listen to your hunches despite there being no evidence to back up their possible validity.
 
4.  Stay loyal and get nostalgic about a stock…no matter what the fundamentals tell you.
 
5. Fall head over heels in love with a stock at the expense of objectivity.
 
6. Follow the herd. Buy a stock when everyone else wants it. 
 
7. Ignore the overall market’s direction when buying a stock.
 
8. Instead of selling into a parabolic run, buy even more of the same stock during the frenzy. 
 
9. Put all your financial eggs in one stock basket. In other words, risk it all on one stock.
 
10. Base your investing decisions on stock tips you hear about from strangers. 
 
Follow these 10 rules and you’ll be well on your way to losing in the stock market. Who needs capital gains.  
 


Disclosure: No individual stocks mentioned