Bad investment advice every novice investor should ignore

If you're just starting your journey to riches, you’ll get lots of opinions from everyone. To help you, here's some bad investment advice every novice investor should ignore.
If you are new to investing, remembering not to follow all the advice you get is essential to making sure you don’t end up in the poor house. Here is a list of the worst investment advice that is usually given to beginners:

Bad investment advice every novice investor should ignore

Invest in products that you love

Why it’s bad advice:You could very well be paying too much for the stock at the time you invest. Being new to the market, it’s unlikely that you’ll know the best time to invest in a particular stock.Don’t use a buy-at-any-cost philosophy; this can be very risky and you’ll regret the purchase at the end of the day.

Buy what you know

Why it’s bad advice:This, just like investing in what you love, is tricky because you are not experienced enough to know if you are buying the stock at a good price.You are limiting the types of stocks that could result in a high yield. It’s quite likely you’ll miss out on some great companies because they are not familiar to you.

Invest in penny stocks

Why it’s bad advice:Many companies with penny stocks have an uncertain future. Sure, you can invest in a stock that’s worth $1 a share and buy a thousand shares for a $1000. But if the company goes belly up because of their large amounts of debt, you just invested in a bust.

Diversify your portfolio 

One of the most common investment advice beginners get is to diversify their portfolios. While this is great for a seasoned investor, if you are just starting out, you are still trying to figure out the rules of investing. There is no way you are able to handle a stock portfolio that requires you to manage more than a handful of stocks at one time. Once you are seasoned and can generate a good base for investing, you'll be able to add diversity to your portfolio.

The right advice for beginners

If you are new to investing, you are going to get a lot of advice from those who feel like they are seasoned investors. Seasoned investors have a lot of advice they like to give, but not all advice is going to help you when you are getting started. If the advice you are getting sounds confusing, the adviser is vested, you are getting unsolicited advice, or it's posed to you as your only option, be leery before you jump in with both feet!

Lastly, make sure you ask lots of questions from your proposed adviser. If they are unable to answer your questions or provide much detail, that’s a telltale sign they don’t exactly know what they are talking about.

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