7 Worst Investing Mistakes People Wish They Can Do Again

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By Todd Kunsman


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Investing mistakes not only cost you money but can also make you feel defeated. And when your pockets and mind are rattled, it leaves opportunities for even more costly mistakes. Yet, when you are first getting started in investing, there are a lot of common mistakes you’ll want to avoid as best as possible.

It can be a great learning experience, but you still want to minimize potential losses that set you back.

Even investing experts occasionally make mistakes, it’s a part of the process.

However, to help you on your investment journey, I’m sharing with you the common investing mistakes most beginners make (and should avoid).

Why Do Most Investors Fail?

The reason why most investors will fail is that they believe beating the markets is possible and that they can accurately predict when to buy or sell. This is where emotions drive decisions and lack of knowledge can cause huge financial losses.

Greed and fear, over- confidence, and lack of true investing experience can cause investors to fail. And this can be even more true if you are just getting started.

But don’t let that scare you off! If you avoid some of the common investing mistakes or recognize them early on, you’ll ensure that you are off to a great start.

And yes, even when you recognized what you need to do and avoid, you might still make mistakes. Every investor will. Your goal is to minimize the cost of your investing mistakes as much as possible!

Learn: Interested in learning more about the stock market and investing? Dive into some of these stock market statistics, which a few may be quite surprising.


Common Investing Mistakes to Avoid

1. Trying to Time The Market

The stock market goes up, the stock market goes down. You’ll also read and hear many financial experts making predictions about when to buy or when to sell in bullish or bear markets.

But timing the market applies to other investing markets too, not just the stock market. Either way, 99% of the time those financial experts are wrong.

The stock market, of course, has some patterns and historical data that can be helpful signals. But that does not always mean the market will do what you think.

One of the common investing mistakes beginners make is trying to time when to buy, sell, or look for ways to make fast cash. Day trading or trying to time the market is highly risky and can quickly cause you to go broke.

There are certainly some successful people in the day trading space, but most have years of trial and error.

Instead, you should try dollar-cost averaging, slowly add to your portfolio over time, and let your money go to work.

2. Not Researching Before Investing

You’ll come across tons of articles, emails, and T.V. personalities talking about stocks to pick or where you should invest your money.

While there might be some interesting information, always do your research before investing.

Most of the email newsletters of stock picks are paid promotions by the company to pump up the stocks worth.

After the hype, you’ll see a stock come crashing down. Sometimes called a “pump and dump.”

Unfortunately, many beginners to investing fall victim to this, because they are not researching.

Do not blindly trust recommendations or follow others without understanding what you’re investing in. It goes with real estate, businesses, art, anything.

There are plenty of stock screeners, tools, and other investing websites that give you information about companies, funds, etc.


3. Not Diversifying Your Investment Portfolio

Everyone’s investing goals, current situation, and status is different. So your investment portfolio and choices are probably unique from the next person.

But one commonality that every investor should have is that they are diversifying their investment portfolios.

By putting all your money in one area, you put yourself at extreme risk. Sure, it might be doing well for awhile, but it can quickly crash and burn.

When you invest, you should be looking at different assets and in different sectors that can weather against downturns and help your portfolio stay balanced.

For instance, I have a mix of stocks, bonds, and some real estate stock in my retirement accounts, as well as some non-us stocks.

If I was all in on just U.S. stocks and the market went down, I’d take a big hit. But I have some other assets to help minimize loss.

Others may explore mixing in real estate properties, gold, and silver, or other alternative investments. Again, these are tailored to your specific financial goals.

4. Thinking Investing Will Make You Rich Quick

Investing can be exciting and it feels good to put your money to work. Out of these investing mistakes, many who are just getting started are looking to get rich quick.

There is always a chance you make some good money quickly, but your mindset needs to shift to a long-game approach.

Building wealth can take time, but your money can exponentially start to grow over time due to compound interest and growth of markets.

If you start to come across hot stock picks or investment opportunities that sound too good to be true, usually they are. And now it’s more like gambling than investing.

5. Investing Too Much Money Before You Are Ready

Not everyone at the start will have a decent amount of money to invest, but even if you do, start slowly.

When you are first learning and armed with some knowledge, you will make some investing mistakes.

It’s great to learn from, but you also what to ensure you aren’t losing thousands of dollars. If you are investing on your own outside of a company 401k, start off small and work your way up to bigger investments.

For example, while I had a company 401k back in 2014, I also started learning on my own with Vanguard and learning about Vanguard’s index funds.

Granted, I didn’t have much to invest, but I added $500 in and left it. I did not add more money for almost two months. When I finally did come back to invest more, it was only $100 at a time for a while.

Even when I had more money saved and was learning, I still worked my way up until I felt comfortable with my knowledge and investment choices.

6. Expecting Zero Risk When Diversified

Even if you have someone helping you and/or you are well-diversified, don’t expect to have zero investing risk.

No matter how good your portfolio and decisions are, there will always be ups and downs in stock market, real estate prices, etc.

You need to understand going in that there is always a chance to lose money, have downtimes, or experience some wild markets (like stock corrections or bear markets).

By coming to terms with this, sticking to your plan, and staying focused on long-term investing goals you’ll learn to avoid the “Selling low, buying high” trap.

I’ve fell into that trap, even when I knew better. It happens.

You get nervous when stocks are plummeting and everyone in the media is writing about doom and gloom. But, if you train yourself to drain out the noise and keep investing, you’ll be fine.

There are certain times you may want to be more cautious and leave some cash on the sidelines, but most times you’ll want to hold your positions and keep going.

7. Not Knowing Why You Are Investing

If you don’t know why you want to invest your money or why you currently are, you can set yourself up for failure.


If you don’t know, then you probably do not care too much either. Create some goals for your current and future finances.

Is your purpose to have assets for the future, accelerate towards retirement, make passive income from your dividends, retire early? Then you should also have a plan in place.

What assets are going to get you to your goals, how much can you afford to risk currently, what and where are you investing in.

Those goals and your plan can change overtime too, which is perfectly fine! My own investment plan is certainly different now, than five years ago when I first started.

The whole point is too keep you on track, engaged with your investments, and be more prepared in your choices.

How To Avoid Investing Mistakes

Beyond recognizing the above investing mistakes and always keeping them in your mind, here are some additional things you can do. These can help you become a better investor.

Build an investment plan

You don’t need to complicate your plan, but truly understand why you’re investing. What are your goals? How will you achieve them with investing? What do you need to invest in and how much?

Understanding those questions and evaluating your finances will put you in a much better place. Building wealth isn’t a race and a long-term strategy that is simplified will be your best bet.

Consult an expert for help

Not everyone wants to be a “DIY Investor” or has the time to really do that. While I’d prefer to follow my own investing rules and self-manage, it was my personal choice.

If you are unsure of where to begin or if your plan makes sense, you can work with a financial advisor.

However, I caution you to not randomly pick someone without researching them. There are some essential questions to ask your financial advisor first, before working with them. It could save you thousands in unnecessary fees.

Set some play money aside

Investing for the long-term can be boring, but that’s a good thing for your money. The thrill of gambling should be left to the casinos, if that’s your thing.

But if you can, set a bit of money aside for you to play around in the stock market. I’m talking about money that if you lose, would not set you financially back or devastate your life.

Do not take money from your retirement account and keep it to 1%-5% max of your total investment portfolio. You can try buying individual stocks or do some day trading. But be prepared to lose all of that side play money and know when to stop.

This can give you some extra thrill, without risking your entire portfolio and money. However, if you lack self-control here then avoid this at all cost so you aren’t tempted.

Final Thoughts

Over the last few years of investing on my own, many of the above investing mistakes I did too. But, I also learned a lot over these years.

Hopefully if you are just getting started with investing, you take these seriously because it can save you money and many headaches.

But remember, if you do slip up, it’s okay!

Be patient and continue to learn about any investing mistakes you do make. Before you know it, you’ll be an avid investor bettering your financial future.

What investing mistakes have you made in the past or more recently? What are some others that beginners should try to avoid? Let me know in the comments below.

This article was produced and syndicated by Invested Wallet.