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Invest in Portugal: 6 Mistakes to Avoid

 Invest in Portugal: 6 Mistakes to Avoid
By Joana P. . 4 years
Categories :
Investing Portugal

To make safer investments, know what mistakes to avoid


Smart investing does not only require knowledge and experience. This is a process that should be executed in peace and requires patience on the part of investors. Although there are no foolproof formula to ensure that a particular investment strategy will work, there are few behaviors you should avoid.


Learn about the most common mistakes made by investors:


  1. Choose a suitable financial product to your portfolio

There are certain investments, such as investments that have an interesting potential profitability. However, i t does not mean that are appropriate for all investors. The reason is that this type of investment has associated risks and not all investors are willing to take them. Before making an investment, consider well if this fits your profile and the risks you are willing to take.


  1. Not to diversify investments

Not because of finding a financial product that suits you should put all your savings into this product. One of the most basic investment rules is precisely not "putting all your eggs in one basket", ie you should allocate your money in different financial products, in order to reduce the risk of losing all your savings.


  1. Do not pay attention to brokerage costs

For investors who appreciate more sophisticated financial products, such as shares, it is essential to choose a good financial intermediary. This is because the brokerage costs vary depending on the chosen intermediary. A Deco study proves that the choice of a cheaper intermediate can lead to saving of 2 thousand euros per year.


  1. Do not place stop-loss orders

The investor must decide how much he/she is willing to lose, to set the moment when to sell the securities in its portfolio. It is very important that investors define a value for the losses that can take and place orders "stop-loss" in their positions to limit losses.


  1. Not having a well-defined investment strategy

It is important not to have too short a time frame for investment. For example, if investing in shares, this horizon should be longer, because assets are suffering very significant price variations. If you have a short time frame, it may be seen forced to withdraw your money at a time when investments are making loss.


  1. Staying focused excessively on good performance

Good results in the past do not guarantee good results in the future. Try not setting a goal to be very profitable in a year, which ensures that this behavior will continue in the year following. While almost all investors know this principle, many do not put this rule into practice, because a lot of our investment decisions are made based on emotions. That's why many investors are attracted to securities that are valued much in desire for profit. Avoid buying bonds when asset prices are too high.