【正确答案】Investment
Investors often make these mistakes:
1. Reluctance to let go. If you have made a bad investment decision, do consider selling the stock even if it results in a loss. The mistake some investors make is buying the stock again at a lower price without analyzing the cause of the decline, hoping to reduce their loss. In fact, the price of the stock may have fallen due to the deterioration of the company's financial position, poor business prospects, or potential law suits. In that case, you are probably wasting your time and money.
2. Herd Instinct—Some investors buy shares when they see hectic buying in the market by other investors, i.e. chasing the price of the stock up. Huge price fluctuations can occur and fade very quickly, leaving naive investors stranded and holding on to stocks purchased at high prices.
3. Inadequate Research—Before you invest in anything, you should familiarize yourself with the risks. Such information can be obtained from newspapers, financial magazines or even on the Internet.
For example, in the case of stocks you may wish to ask yourself the following questions: Does the company have a good management? What type of business is the company in? Does the business have growth potential? Does the company have a good profit track record? What are its prospects? How volatile is the company's stock price? If the price of the stock is volatile, will you be able to tolerate the risk?