Common Investing Mistakes

Updated: January 17, 2022

Simple Mistakes People Make When Investing Their Money

#1  Pursuing the Last Hot Thing

Sometimes a hot trend can go on for a long time...

There are no guarantees though.

You do not want to be that person "changing lanes" at the wrong time. It is not profitable.

#2  Relying on Tips

Following tips might work a few times...

But it does not work over the long term.

Relying on random tips is not an investment strategy.

You need a method to find investment ideas, not tips.

#3  Only Considering the Profit Potential

An investment must show good profit potential...

But there are other things to consider.

Sometimes the risk is just too high, or it would take a long time to realize the profit.

#4  Start Investing without a Plan

What would you do if something goes wrong?

When would you take the profits, or cut the losses?

Otherwise, you would be leaving too much to chance.

#5  Overestimate Own Risk Tolerance

People believe they can handle risk well... when they can not.

Whenever prices start falling, people panic because they took "too much risk" for their ability.

Which Mistake Would You Add to This List?


About the author

Ricardo Ribeiro, PRM

Investment management professional with a career spanning more than 20 years in the financial sector. Adept at integrating market risk analyses into investment strategies. Committed to helping aspiring investors get to the next level, and to shaping the next generation of investment tools and models. Mr. Ricardo Ribeiro holds a Professional Risk Manager (PRM) designation from the Professional Risk Managers' International Association (PRMIA).