Top 5 Common Investment Mistakes to Avoid

Investing is a great way to increase wealth and work towards your lifestyle and financial objectives. Being aware of the investment mistakes to avoid is vital.

But it’s not a smooth process, and many investors can make mistakes that can ultimately be very costly.

So, what are the top 5 common investment mistakes to avoid, to make the most of your investments and stay on course to achieve your goals?

Putting all your eggs in one basket

If you limit your investments to one market or industry, you could be particularly vulnerable if it experiences any shocks or volatility.

Diversifying your portfolio across various assets and markets reduces your risk exposure and enhances your ability to weather economic or market downturns.

Being guided by your feelings

Emotions can run high as you monitor the progress of your investments, particularly if the stocks you’ve invested in start to plummet. Fear and panic can easily cloud your judgment, prompting you to withdraw from the market and sell your stocks.

But markets constantly go up and down, and they always recover even after the biggest shocks.

So, if the value of your investments plummet overnight, don’t let yourself be guided by your feelings and emotions. Sit tight, stay calm, stick to your long-term investment plan, and make sure any decisions are based on hard data, not sentiment.

Timing the market

Market fluctuations are a constant companion for investors, and it can be tough to anticipate which way it will go in the coming days, weeks and months. Recognising these fluctuations will help you with the investment mistakes to avoid.

That’s why trying to time the market is a mistake, as you could end up missing out on the chance to earn higher returns and sell at a loss. Time in the market is more important than the timing of the market.

Again, it would be best if you stuck to your long-term investment strategy and goals rather than acting impulsively.

Not reviewing your portfolio.

Many investors fail to review their investments regularly and adjust the weightings of different asset classes in their portfolios.

However, reviewing at least every year or sooner is essential, depending on the complexity of your plans and investments.

Updating and reviewing your attitude to risk is also essential to check on a regular basis. This allows for changes in your circumstances. Ensuring you are using the right fund managers and styles is very important.

By doing this, you can be confident your portfolio reflects the amount of risk you’re happy to be exposed to and aligns with your long-term goals.

Read about the most common pension mistakes to avoid

Working with the wrong investment adviser

Getting the right advice is essential if you’re going to be a successful investor. So, ensure you turn to a professional, regulated adviser who will act in your best interests.

Independent advice ensures the adviser can access the whole market and work on your behalf.

Check the FCA register to ensure the adviser is authorised and regulated.


As we’ve stressed throughout this article, you need to adopt a long-term strategy for investing, so it’s essential to be willing to give your investments time to grow.

With that in mind, don’t tear yourself up by checking market movements daily.

If you plot a graph with daily movements, you’ll end up with a very jagged line. But if you plotted a graph just with the figure from a year ago to today, you’d end up with a straight line, ideally heading upwards.

Your ultimate destination is more significant than the path taken; prioritising short-term gains in your investments is futile.

It’s important to remember that when investing, the value of your money can fall as well as rise, and investing is not for everyone.

If you have any questions about managing your investment portfolio, please get in touch with us; we’ll be happy to speak with you.