Why Do Many New Investors Quit Investing in Their First Year?

[Suba]

Investment instruments like stocks and cryptocurrencies have attracted many new investors, but unfortunately, many of them are disappointed and abandon or sell their investments before the first year is up. This phenomenon will certainly be interesting to discuss in the DBucks forum. Why does this happen?
1. Expectations vs. Reality: a huge gap, leading to stress, the influence of FOMO, lack of support, etc.
2. New investors are often influenced by psychological biases such as loss aversion, overconfidence, herd mentality, and sort-termism, making them impatient with long-term investing.

 

[gwolf666]

I believe one of the main reasons many novice investors abandon their investments in less than a year is the gap between their expectations and the reality of the market. When someone starts investing, they generally expect quick and easy profits, but reality is often more complex and requires patience and discipline. The influence of FOMO (fear of missing out) also plays a significant role, causing people to make impulsive decisions without long-term thinking. Furthermore, many new investors fall prey to psychological biases, such as loss aversion or overconfidence, which can lead them to sell during periods of volatility and miss out on growth opportunities. The mindset of seeking immediate results in instruments like cryptocurrencies or stocks can be dangerous. Financial education and patience are key to avoiding these mistakes and maintaining a solid long-term strategy.

 

[Stardom22]

Investment is not easy because it comes with risks that mostly are unavoidable to happen. So most people lack the resilience for sure.

 

[Fidelia]

I think it is the weight of expectations that turns out unfulfilled that makes people to regret investing after the first one year.