Owning assets are important not only for now but also for your future. Besides just own, you also need to develop it to have a higher asset. You can start by purchasing real estate, gold, or the most popular investment. Investing can be varied. If you have sufficient money, you can start by purchasing stocks. While if you do not, try mutual funds. However, investing can be very challenging. You need to pay attention to the market growth and decide when is the right time to buy and sell your asset. Here are some mistakes that may be faced by a beginner investor that you should avoid:
- Purchasing stocks because of the ‘good story.’
Many novice investors often fall for the company’s story. When a stock is “booming” and news about the stock appears everywhere, investors gradually “fall in love” with the issuer. What happened? Beginner investors tend to have a confirmation bias, which means they ignore the terrible things they hear about their favorite stocks and even accept only positive news. The lack of fundamental analysis is the reason why novice investors cannot achieve maximum profits. That’s why as investors, we must avoid buying on news mistakes. Instead, novice investors must make decisions by anticipating the market’s reaction to the news.
- Beginner investors often ‘let their loss run.’
Beginner investors hate the word ‘cut-loss’. Why? Because they do not realize that they have made the wrong decision in buying shares, so they are reluctant to cut losses. Often novice investors who make this mistake have not done an in-depth analysis before buying shares. When it comes to newbies, novice investors think, ‘oh, this stock is said to be good; just keep it up first. After all, it will return to the top price’.
- Not paying attention to industry prospects
When buying stocks, it is equally important to consider the long-term prospects of the industry. However, sometimes novice investors are fixated on past prices. For example, when you see a stock hit an all-time low, novice investors tend to buy the stock. However, not all companies can return to their former glory. Will the issuer industry still has bright prospects in the next five years, or will innovations replace it? Therefore, having the ability to analyze macroeconomics is necessary to predict the prospects of the industry in the long term and avoid these mistakes.
- FOMO, when the shares sold, go fast
The extreme daily volatility in the stock market causes some investors to panic and sell their positions too quickly. Sometimes after selling the stock, the stock price suddenly ran fast. Of course, this causes regret and triggers FOMO. As a result, it is not uncommon for novice investors to repurchase the shares at high prices until they finally get stuck.
- Investment mistakes start with hot money.
Buying with margin/debt can produce significant profits based on analytical skills and sufficient investment experience. A reliable investor already understands the risks of the decisions taken and can limit the risks. But for most novice investors who have limited experience in the stock market, buying on margin can lead to big losses, especially if an investor makes the mistake of using retirement money or children’s education to invest in stocks.
- Investors take aggressive decisions irrationally.
When looking at a green portfolio, sometimes novice investors quickly feel satisfied and confident. This kind of thinking encourages investors to be more aggressive when buying and selling shares. This action is not wrong if accompanied by sufficient knowledge. However, the idea of wanting to get rich quickly makes it difficult for many novice investors to stay in the stock market. With this mindset, novice investors tend to think, ‘Oh, the more money I put in, the faster I get rich.’ However, they rarely consider how much loss they are willing to suffer if the stock price drops.
If you want to start investing but still do not know which stock you want to buy, you can check the SBE stock. The following article will give you insight into SBE stock to know more about the performance of the market.
What is an SBE stock?
SBE stock or Switchback Energy Acquisition is a stock that is acquired from a special acquisition certain company. The main aim is to bring companies into the public without going through the complex process of traditional IPO. Some people may think that this stock should be ‘break’ the market. However, it is not always happening. In terms of Electrical vehicles (EV), many investors are interested in Tesla (TSLA). Tesla’s stocks are rising up to 20,000 percent since its listing in 2010. With the big influence of Elon Musk, it seems that the stocks will keep rising. It also means that SBE has the chance. The main target is embracing ChargePoint, which is established in 2007. In 2020, SBE can reach revenue up to $135 million and have 85.77 times of price to sales.
What happened SBE stock?
Before purchasing SBE stock, you also need to take a look at the market first. In September, Switchback said that their target is $10 for each share. Some investors have expected once Switchback buys ChargePoint, and the stock will rise. However, after this condition, it means that Switchback has little chance to increase their stocks anymore. From this condition, you can conclude that you do not expect the stocks’ value will ‘pop’ on the day of the merger after the merger. However, in 5 months, the value can increase up to three times. If you are interested in purchasing this stock, consider again and find out more about the performance on the market.
Is SBE a good stock to buy?
There are so many stocks available on SPAC, but SBE is different. It seems that Switchback still has a good performance even after the merger. It is because ChargePoint also has a pretty high amount of funds. Besides understanding more about the Electric Vehicle (EV), purchasing SBE can be one of your lists if you are interested in having this sector’s stocks.