Whatever the field, it is always better to start learning young. Investment is no exception to the rule. Errors are common when learning a new subject, but when it comes to money, it can have serious consequences. No panic, however, as young investors have the luxury of flexibility and enough time to take risks and recover from their losses.

Procrastinating

Procrastinating is never good, but because the markets are constantly changing, this can be particularly detrimental to your investments. Finding good investment ideas is never easy. If, after doing research, you discover a good investment idea, it is important to act quickly, before the rest of the market realizes it and you are ahead. Young investors, in particular, may be reluctant to grab a good idea for fear or lack of experience.

Missing a good investment idea can lead to two bad scenarios:

• The investor will review his opinion up and buy at a price too high. Maybe the investor is right in thinking that a security rated 25 euro should be worth 50. If it reaches 50 euro before he could buy it, he will tend to rationalize his mistake and revising the price target upward. The title would then be artificially ... 60 euros.

• The young investor is looking for a replacement investment quickly. In the previous example, the investor who did not buy the title, increased from 25 euros to 50 euros, may try to find another that will double the price. As a result, he may be buying another title too hastily, without having done the previous investigation work, in order to compensate for his previous "missed opportunity". Young investors often end up with too many choices and not enough money.

Speculate instead of investing

Being young is an advantage in his career as an investor. At equal wealth, the age of an investor positively affects the risk level that he or she can take. A young investor may seek to make bigger returns by taking bigger risks. This is so because if a young investor loses money, he will have time to recover from his losses. It may sound like an argument for speculation, but it is not.

Any novice investor will be seduced by speculation if he does not fully understand the investment process. Speculation is often similar to gambling because the speculator is not always rational in his decisions. The sole reason for the purchase is that the stock could appreciate. This can be dangerous ; many experienced investors are just waiting to take advantage of their less experienced counterparts.

Rather than speculating and wagering, a young investor should look to invest in companies with greater upside potential over the long term. Thus, while a diversified portfolio of small caps may not be suitable for an investor approaching retirement, a young investor will be better equipped to manage this risk and will benefit from it.

The last risk associated with speculation is that a big loss can mark a young investor and affect his future investment choices. This can give rise to a fear of investment.

Use too many lever effect

It has its advantages and disadvantages. If investors have the opportunity to add leverage to their portfolios, it's good when they're young! As mentioned earlier, young investors can recover from losses more easily by generating future profits / revenues. But beware, just like speculation, too much leverage can negate your capital.

If a young investor is able to cash a 20 to 25% drop in his portfolio without feeling discouraged, a 40 to 50% drop in leverage that is twice as big may be too much to bear. The consequences of such a loss are similar to those of a loss due to speculation: the young investor may be discouraged and develop an excessive risk aversion for the rest of his life as an investor. Feel free to use the trading demo accounts offered by your broker to get started!

To ask too little questions

If an action falls a lot, the young investor often expects his share price to rebound immediately. But this happens only rarely because often the price of an action collapses ... for good reasons.

Always ask "why?" If an asset trades at only half of its value, there is necessarily a reason and it is the investor's responsibility to find it. Young investors who do not know the pitfalls of investing too often make decisions without taking into account enough parameters.

Do not invest

When you are still young, it can be difficult to plan your investments for the long term. It's so much easier to find out how to spend your money; home equipment, appliances, car, etc ... And anyway, the retirement seems so far!

And yet ... it is better to sow early to harvest bigger. Capitalized returns will help you.