Common Mistakes Retail Investors Make During Bull Runs
Antara Bhattacharyya
Chasing Stocks at Peak Prices: Retail investors often rush into trending stocks without evaluating fundamentals, increasing risk of losses when market corrections follow unexpectedly.
Ignoring Portfolio Diversification: Overexposure to one sector during bull markets magnifies downside risk, reducing overall stability and hurting long-term wealth-building potential significantly.
Following Herd Sentiment Blindly: Many investors copy others’ trades without research, leading to poor decisions driven by hype rather than solid financial analysis or strategy.
Lack of Clear Exit Strategy: Investors often forget to set profit targets or stop-loss levels, resulting in emotional decision-making and avoidable losses during sharp market reversals.
Misjudging High Valuations as Safe Bets: Assuming rising prices guarantee future gains can be dangerous, as overvalued stocks may correct sharply once bullish sentiment cools down.