10 common investing mistakes

Most investing losses do not come from bad luck but from a handful of avoidable mistakes.

The list

• 1. Starting too late. Time is the strongest lever — see the compound interest calculator.
• 2. No emergency fund. It forces you to sell at the worst moment.
• 3. Chasing hot tips and last year's winners. By the time something is on every feed, much of the move is often done.
• 4. Concentration. One stock, one sector or one country is one bet.
• 5. False diversification. Many funds that hold the same things.
• 6. High costs. Fees and frequent trading compound against you.
• 7. Panic selling in crashes. It turns temporary losses into permanent ones.
• 8. Taking more risk than you can stomach. You only find out in a drawdown — when it is too late.
• 9. Constantly changing strategy. No approach works every year; switching guarantees you catch each one at its worst.
• 10. No written plan. Without rules, emotions decide.

The common thread

Almost every mistake comes from acting on emotion instead of a process. Start with the learning path and build your own rules.

By Dr. Harry Hamann · 5 min read