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COMMENT
"We made too many wrong mistakes." ~ Yogi Berra You have to feel a tad sorry for Mizuho Financial Group. Japan's second-largest bank said a typing error, which is sometimes called the fat finger syndrome, triggered billions of yen of trade in a newly-floated company called J-Com. What happened was a trader at the bank entered an order to sell 610,000 shares at 1 yen when he actually intended to sell just one share at 610,000 yen. It now seems the fat-finger fiasco is likely to cost Mizuho £125m. Blimey! But before we start wagging our own fingers in disapproval, let me just say that typign errosr aer nto taht unusaul - we all make them. However, dealing mistakes of million-pound proportions is a different matter. It may be a sign of trading under stress, or worse still over-confidence. In fact, over confidence in all its guises, is one of the most common mistakes that novice investors make. Just think, it so easy to think you've got the market all figured out after a run of success. But that is also the time when when your portfolio may take a turn for the worse. Problem is, we sometimes confuse successful investing in a bull markets with being a good investor, and muddle up luck with skill. Another frequent investing mistake is to try and make back losses by taking bigger risks than necessary. Sometimes this may be prompted by overconfidence, but at other times it may be to exact revenge on the market for causing our losses in the first place. Either way, it can be a recipe for disaster. Thing is, the market doesn't care whether your portfolio is in profit or loss. Buying shares with money that you can't afford to lose is another common blunder. It is generally accepted that in three out of four instances, shares have done better than other types of assets (including cash and bonds) over five years. So ideally, you should be looking to leave your money invested in shares for at least five years, and preferably a lot longer, to get the full benefits. Another investing mistake is to listen to gossip. It's so easy to do because despite a plethora of shares on the market, we are often still stumped for investing ideas. Consequently, we listen to the man down the pub, who probably knows a lot less about investing than you. A better idea may be to pick the brains of investors who have a proven track record. Under Champion Shares editor Maynard Paton's stewardship, the Motley Fool Qualiport outperformed the FTSE All-Share index during 2001, 2002, 2003 and 2004. So if you need help with your investments, sign up today for a free 30-day trial to Champion Shares and you'll receive our next update in mid December.
