What Not To Do As An Investor When Stock Market Is At All-Time Highs

India¡¯s stock market indices, Sensex and Nifty, have already hit fresh all-time highs on two consecutive days this week (Monday and Tuesday). Even today, Sensex closed marginally up 0.5% at the 69653 mark, whereas Nifty ended 0.4% up at the 20937 mark.

While it has indeed been a good and happy time for stock market investors, it is equally important in such times to avoid some big investment mistakes when the market is riding high. Here are five mistakes you, as an investor, must avoid when the stock market is at an all-time high:

5 Mistakes To Avoid When Stock Market Is Surging

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1.Stopping SIPs & Redeeming Mutual Funds

Seeing your mutual fund investment portfolio all green amid stock market highs often tempts investors to redeem them, right? Some investors might have already been thinking of halting or even redeeming their SIP investments. This is where they tend to go wrong.

Here, it is important to keep in mind that stopping your SIPs also means stopping your savings, which is not a smart move. Also, avoid the temptation to redeem your mutual fund's lump-sum investments. If you ever wish to redeem your mutual funds, click here to know what all should be the reasons behind it.

Keep in mind that an investor who sticks to his SIPs regardless of market fluctuations is probably going to profit more than an investor who lets his or her decisions be influenced by market sentiment.

Also Read; How The Stock Market Crash Of 1929 Led To World War II

2. Taking on more risk than you can withstand

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When the markets are performing well, it may not be a bad idea to book profits on stocks and mutual funds, right? But what is wrong is to take more risk than you can withstand. In the temptation to gain more and more profits, don't forget the volatile nature of the stock market, which can land you in losses too. So only invest as per your risk appetite.

3.Following the herd mentality

Fear of missing out (FOMO) is among the biggest emotions that cause many investors to follow what others are doing without doing a thorough analysis of the stock market. If you only follow advice from friends, coworkers, WhatsApp groups, or the media, you might just end up losing your hard-earned money. miss important details and take unnecessary risks.

So make sure to defy peer pressure and don't let FOMO overpower your thoughts and emotions. Always adhere to a clearly defined investing plan that takes care of your risk appetite and financial goals.

Also Read: How A Science Genius Lost Millions In The Stock Market

4.Chasing performance when buying stocks

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Chasing performance is another common mistake you can end up making when market is riding high. This involves investors buying stocks that have performed well in the past, with the expectation that they will do so again. But since the stock market is volatile, there will always be some stocks that perform better than others and some may not perform like they did in the past.

So, don't just chase the performance of stocks, and factor in these aspects when picking stocks.

5.Doing overtrading

Another mistake made by investors during stock market boom, is overtrading. As it can be tempting to trade frequently in the hopes of making quick profits when the markets are rising, it also ends up in overtrading, which can result in losses, particularly if you lack experience.

Even according to a quote from Warren Buffet, "The stock market is a device for transferring money from the impatient to the patient". So all you need to have is patience irrespective of the market going high or low!

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