I've been investing long enough to have made most of the mistakes myself. Not the theoretical kind you read about in books — the real kind where you watch your money disappear and feel sick about it. If there's any value in getting older and having a few decades of investing behind you, it's that you've had time to be wrong enough times to recognise the patterns.
What follows are the 5 investing mistakes that I see people make most — including me, repeatedly, across multiple market cycles. I'm writing this not because I've conquered them all, but because naming them out loud helps me resist them. If it helps you too, that's a bonus.
Mistake number one: not having a plan. This sounds obvious but almost nobody actually does it. Investing without a plan is like getting in the car and driving without knowing where you're going — you'll cover a lot of ground but you won't necessarily end up anywhere you want to be. A plan doesn't need to be complicated. Mine fits on a single page and answers four questions: what am I investing for, over what timeframe, through which accounts, and into what types of assets. That's it. The point of the plan isn't to be clever. It's to stop you changing your mind when the market changes — because the market always changes, and the worst decisions are made in the moment.
Mistake number two: reacting to headlines. I did this for years. The news would say recession fears, I'd skip my monthly contribution. The news would say all-time highs, I'd buy more. I was buying high and skipping low — literally the opposite of what you want to do — and I was doing it because my mood was being set by financial media designed to generate clicks, not to generate returns. Auto-investing changed this for me. A set amount, same day every month, regardless of what the headlines say. I don't read the financial news before the auto-invest fires. I don't check what the market did last week. The money goes in like clockwork and it removes the single biggest source of my historical underperformance: me, reacting to things that felt urgent and weren't.
Mistake number three: chasing the hot thing. I have a personal rule now: if I hear about an investment from a newspaper headline, a taxi driver, or someone at a dinner party, I'm already too late. The easy money was made by the people who got in before it became dinner-party conversation. This doesn't mean you can't invest in exciting things — I own some speculative stocks and I've written about them on this site. But they're small positions, bought with money I'm prepared to lose, and they're satellites around a core of broad, boring index funds. The danger isn't buying something speculative. The danger is buying too much of it, too late, because you're afraid of missing out. FOMO is not an investment strategy. It's an emotion, and emotions make expensive decisions.
Mistake number four: overconfidence after good periods. This one is sneaky because it feels earned. You make some good calls, the market cooperates, your portfolio is up, and you start to believe you're good at this — that your returns are skill rather than a rising tide lifting all boats. Then you take bigger risks because you're confident, and the market reminds you that you weren't as smart as you thought. I've been through this cycle probably five times now. The only defence I've found is to keep a written record of why I make each investment decision, so I can go back later and see whether the reasoning held up or whether I just got lucky. Most of the time, I just got lucky. That's a very humbling file to keep, but I recommend it.
Mistake number five: ignoring fees. For most of my investing life I didn't think about fees at all. I'd pick funds based on a name I recognised, a star rating, or a news article, and never once looked at the ongoing charges figure. That was expensive. The difference between a fund charging 1.5% and an index fund charging 0.07% doesn't sound dramatic on paper. But compounded over 20 or 30 years, the maths is brutal. On a six-figure portfolio, the difference can run into tens of thousands — money you never see leave your account but that's gone nonetheless. Everything I hold now is low-cost. Broad ETFs, minimal fees, no performance charges, no entry or exit fees. The fees are boring. The compounding of what you save by avoiding them is not.
Those are the big five. No plan, reacting to headlines, chasing hot investments, overconfidence, and ignoring fees. I've been guilty of all of them, sometimes all at once, and most of them more than once. The goal isn't to be perfect. It's to make each mistake less often, and less expensively, than you did last time.
These days I have a simple system. A written plan. Auto-investing. Core holdings in broad index funds. Small, controlled satellite positions for things that interest me. Minimal fees. And a quarterly check-in rather than daily portfolio watching. It's boring, and boring has turned out to be much more profitable than exciting. I wish someone had told me that at the start.
For educational purposes only. Nothing here is financial advice. All investing carries risk — you may get back less than you put in. Past performance does not guarantee future results. The mistakes I've made are personal and what I do now may not be right for you. Always do your own research.