7 Key Things Investors Often Overlook
- Not Having a Clear Financial Goal
- Focusing Only on Total Returns Instead of Net Gains
- Letting Emotions Drive Investment Decisions
- Lacking Patience
- Investing Money You’ll Need Soon
- Failing to Diversify the Portfolio
- Simply Following Trends
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Feelings of doubt or anxiety often arise when investment results fall short of expectations. In mutual fund investing, there are many factors to consider to help your investments grow optimally.
That’s why it's important to understand the root causes behind underperforming investments—so you can avoid making the same mistakes in the future.
7 Key Things Investors Often Overlook
When your investment doesn’t deliver the expected results, the problem is often internal. Here are some of the most common reasons why your investment may not be growing as planned:
1. Not Having a Clear Financial Goal
Investing in Mutual Funds without a clear purpose can leave you feeling directionless. To maximize returns, you need a clear vision of what you’re working toward.
Is your goal to fund education, save for retirement, or purchase property? Defining specific goals helps you choose the right instruments to support them.
Without a clear vision, it’s difficult to build a suitable strategy. You risk selecting the wrong products or making poor decisions that could hinder your progress.
With focused goals, managing your investment portfolio becomes more strategic. Remember: every investment step should align with your long-term financial plan.
2. Focusing Only on Total Returns Instead of Net Gains
Many investors get caught up in high total return figures, forgetting to account for hidden costs. While total returns may look attractive, net gains are what truly matter.
After deducting fees, taxes, and transaction costs, that impressive return can shrink significantly. Always evaluate your investment performance by factoring in all associated expenses.
Ignoring these hidden costs can lead to unrealistic expectations or irrational decisions. Focus on net profit after deductions to measure how effective the investment really is.
Don’t be misled by large numbers that don’t reflect actual earnings. Ensure every investment decision is based on realistic results, not just total return projections.
3. Letting Emotions Drive Investment Decisions
Uncontrolled emotions can become a major obstacle in mutual fund investing. During market downturns, fear may prompt you to sell assets prematurely.
Conversely, in bullish markets, greed may push you to invest impulsively without proper analysis. These emotional decisions can be harmful to your portfolio.
That’s why maintaining emotional balance is crucial. Every decision should be rooted in careful analysis—not temporary feelings.
If you let emotions take over, you may miss out on gains you could have achieved. Practicing patience, maturity, and rational thinking is key to successful investing.
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4. Lacking Patience
Mutual Fund investing requires patience — and that’s one of the keys to long-term success. Many people tend to seek quick results and end up making rushed decisions.
In reality, significant gains don’t happen overnight. If you’re tempted by instant returns, you may actually harm your financial progress.
Allow your invested funds time to grow. Every investment instrument needs time to mature, and patience can lead to better outcomes.
Avoid the urge to withdraw funds too early when the market is down. Don’t let the desire for quick wealth sabotage your long-term gains.
5. Investing Money You’ll Need Soon
Mutual Fund investments should be made using funds you won’t need in the near term. One common mistake is allocating money meant for urgent needs into long-term investments.
If you invest money you’ll soon need, you face greater risk. Market downturns can trigger psychological pressure, tempting you to withdraw early — potentially at a loss.
This can lead to avoidable financial setbacks. Always ensure you’re investing funds that you’re willing to set aside and let grow over time.
This approach reduces emotional stress and helps you make more rational investment decisions. Investing should never be forced, especially when the funds are needed soon.
6. Failing to Diversify Your Portfolio
Diversification is a fundamental investment principle that’s often overlooked. Allocating all your capital into one asset type or sector exposes you to greater risk.
Diversification allows you to spread your risk by investing in different types of instruments. If one asset underperforms, others can help offset the loss.
With a well-diversified portfolio, you minimize the likelihood of large losses. Don’t put all your eggs in one basket — markets can be unpredictable.
Different assets offer balanced potential returns and more controlled risk. Ensure your portfolio includes a healthy mix of investments for more optimal results.
7. Simply Following Trends
Many investors are drawn to trending Mutual Fund products. While some trends may yield short-term gains, not all are sustainable.
Blindly following the crowd without a deep understanding of the investment instrument can lead to losses. It’s important to conduct thorough analysis before investing — not just follow the hype.
Every investment decision should be based on a solid understanding of the product and your personal risk profile. Trends shift quickly, but data-driven decisions lead to more consistent results.
Don’t let short-term trends distract you from wise, well-planned investing. Always consider your long-term goals and the fundamentals before following market movements.
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Getting started with investing no longer needs to be complicated or overwhelming. With DBS Treasures, your funds are managed by experienced professional Investment Managers.
You don’t need to monitor the market daily—your portfolio is managed using best-in-class strategies. DBS Treasures also provides access to a dedicated financial team that proactively shares timely insights and market analysis.
This way, you can access investment opportunities that match your personal risk profile. A sound diversification strategy is also applied—your funds are distributed across various instruments to help minimize risk.
What’s more, you can enjoy a seamless experience through the digibank by DBS Application, making Mutual Fund investing even more practical.
Through this app, you can register your Single Investor Identification (SID) and conduct secure buy, sell, or switch transactions—anytime, anywhere.
You’ll also be supported by curated market analysis from our team of financial experts, powered by Artificial Intelligence and Machine Learning (AI-ML). These insights are tailored to your risk profile and portfolio needs, and come with curated solutions for both investment (Grow) and insurance (Protect)—so you can invest confidently through your preferred channel.
DBS Treasures Priority Banking is ready to support you with expert service and timely market insights. Click here to learn more about Mutual Fund investing with DBS Treasures Priority Banking.
