3 Investing Red Flags I will avoid in 2024
As we start off the year of 2024 its becoming more and more necessary to invest. Whether it be in the stock market, real estate, starting your own business, or just investing in yourself. A key thing that I am learning is that a successful investor is one who is in control of their emotions. The most successful investors of all time are some of the most calmest level headed people ever. Think back to anytime you were angry or completely sad. In that state did you make a wise decision? The answer is probably no.
The best investors are not emotionless people, but they at least are able to understand the state they are in and wait before they make any decisions. A good rule of thumb is to wait at least 48 hrs before making a decision and see if your opinion changes. Now not every situation will give you the luxury of doing this but in the investing world I think for the most part we have the ability to do this. You almost have to have an outer body experience (shoutouts to Dr. Strange) looking at yourself from an objective standpoint. Having an investment thesis or strategy helps with that. I go into detail on that in my Investing In You course.
Let’s go through 3 Investing Red flags to watch out for in 2024 that I will be watching out for…
1. When someone is making you feel like there will not be another opportunity.
This is something that I struggled with for a while. When a new company is exploding on the stock market or the real estate market is on the steep incline, or when investing in this new business model is a now or never opportunity. Let me say this really clear in bold so you don’t forget it: Never invest in anything simply off the premise that you must do it, because you feel as though the opportunity may never come again. I firmly believe there are many investment opportunities out there, but you will not get everything right and that’s okay! Warren Buffett had an opportunity to invest in Amazon in 1994 and he admitted he blew it, and that’s okay! He said “I didn’t understand the power of the model”. The key lesson here is that with Warren he is okay to miss an opportunity if it does not fit his thesis at the time. Once the company gets to a point where it fits his criteria he will then invest. Thinking this way takes the emotion out of it.
2. Investing in something that you don’t use.
I’ve mentioned this so many times before if you’ve been subscribed, but investing in a company that you don’t use yourself is a great litmus test. It’s kind of like putting your money where your mouth is. If you think that this company is going to make you money well then prove it. Do you like their products? Would your life be easier or harder if the products didn’t exist? How hard is it for you to switch the service or the product of this company? This is a good self check to let you know if the company is a good one in your own eyes from an qualitative standpoint.
3. Is your confidence in your educated guess greater than your hope?
Lets be honest every single investor out there is essentially guessing. However, some people are making a guess with information or a strategy in place while others are simply making a decision off of pure hope. Make sure that wherever you choose to place your money the information you’ve obtained outweighs your hope! Keep in mind that there will always be a probability of being wrong, but the less you hope and the more you use well informed data to make a decision, the greater chance of success you will have. Hope is what you do when you play the lottery investing is what you do when you have valid information on the what, how and why.
I wish you a prosperous and fruitful 2024 ahead.
Happy Investing,
Kobi