The worst thing an investor can do is blindly invest. Mutual funds, like equity funds, are generally engineered for long-term investing but some people invest to earn a quick buck. Many investors invest without understanding the risk, the fees and charges associated with it.
Financial planning is something every individual should prioritize. When an investor starts his/her journey, they should have investment goals in mind. Why is it important? The reason remains, with a clear view in mind they can have a better understanding of what financial product to choose to invest, how much money to invest and what to do with the returns earned from the investment. Without being clear on this, the investors will be left confused which would lead to financial mismanagement.
Wealth is created over a long period of time through investing and many investors do not possess the patience to wait that long. This leads to them cashing out earlier than anticipated, thus missing out on later gains.
Every investor has a certain risk appetite and every investment product carries a certain amount of risk. One must assess their risk appetite before starting their investment journey and should stick to it throughout it.
A lot of investors do not do their own due diligence rather depend on tips and other media sources for taking investment decisions. This leads to them investing in financial products that are the hot picks for the time being. More often than not, such investments lead to a negative return.