What is the biggest investing mistake beginners make?

The biggest mistake is trying to time the market — waiting for the 'perfect' moment to invest. Markets go up over the long term, and time in the market consistently beats timing the market. Other common mistakes include chasing hot stocks based on headlines, panic selling during market dips, and not starting early enough to benefit from compound interest.

Is it normal to lose money when you start investing?

Yes, market fluctuations are completely normal. Even experienced investors see their portfolios drop temporarily. The key difference is that experienced investors don't panic and sell — they understand that market dips are part of the long-term journey. Steve at Buy Less Crap has made plenty of mistakes himself, which he shares openly. ETFs and index funds tend to recover over time if you hold through the volatility.

Learn From My Pain

Everything I got wrong and what it taught me.

I've been investing since 1999 and I've made almost every mistake in the book. Here they are — so you don't have to make them too.

The Hard Lessons

Mistakes that cost me money.

These aren't theoretical warnings — these are real mistakes I made with real money. Each one taught me something that shaped how I invest today.

I tried to pick individual stocks

Thousands lost on 'sure things'

For years I thought I could pick the right companies and do better than the market. I bought shares in businesses I was convinced would soar. Some did okay. Most didn't. A few went to zero. Every time I thought I'd found 'the one', the market reminded me I wasn't smarter than everyone else.

What I Learned

You are not Warren Buffett. Neither am I. Buying the entire market through a broad ETF means you own the winners without having to guess which ones they'll be. Over the last 20 years, around 90% of professional fund managers didn't match the market. If they couldn't do it, why did I think I could?

I panicked and sold during a crash

Turned a temporary loss into a permanent one

During the 2008 financial crisis, I watched my portfolio drop 40%. Every day the news was worse. Every day I felt sick. I sold near the bottom because I couldn't take it anymore. By the end of 2009, the market had recovered most of its losses. By 2013 it was at new highs. I had locked in my losses and missed the recovery.

What I Learned

Historically, markets have recovered from major downturns — the S&P 500 has survived two world wars, the Great Depression, the 1970s oil crisis, Black Monday, the dot-com crash, 9/11, the 2008 financial crisis, and a global pandemic. Past recoveries don't guarantee future ones, but the long-term pattern has rewarded patient investors. Locking in a loss by selling at the bottom is the one move that removes you from any recovery.

I kept waiting for the 'right time' to invest

Years of missed compounding

After the 2008 crash, I was scared to get back in. I sat in cash for years, waiting for a 'safer time'. Every quarter I'd say 'next month'. Next month became next year. Next year became five years. All the while, the market was climbing. The 'right time' never felt right — it never does.

What I Learned

Time in the market tends to beat timing the market — that's the consistent lesson from long-term investing history. The best time to start was years ago. The next best time is now. Don't wait for the 'perfect' entry point — if you're investing for decades, the exact timing of any individual contribution matters far less than simply staying consistent.

I overcomplicated everything

Fees, stress, and worse returns

I had a portfolio with 20 different funds, individual stocks, and a few investment trusts. I was rebalancing quarterly, reading analyst reports, and tweaking allocations constantly. It felt sophisticated. In reality, I was generating fees, creating tax headaches, and almost certainly underperforming a simple global index fund.

What I Learned

One broad ETF holds thousands of companies. Buying another ETF doesn't make you more diversified — it just makes your portfolio more complex. Simple works. One fund, regular contributions, decades of patience. Everything else is noise.

I underestimated the power of fees

Decades of compounding lost to 1-2% fees

For years I didn't pay attention to the fees on my investments. A 1.5% management fee sounds small, right? It isn't. Fees compound just like returns do — in the wrong direction. Over 30 years, the difference between a 0.1% and a 1.5% annual fee on a meaningful portfolio can run into hundreds of thousands of pounds. I worked this out too late. Don't make the same mistake.

What I Learned

Fees matter enormously over long periods — a difference of 1% a year can compound into a meaningful sum over decades. I now check the OCF (ongoing charges figure) before I buy anything. For me, the cheapest broad ETF is usually the one I go with — but which ETF you choose (if any) is your decision.

I chased past performance

Bought high and watched it mean-revert

I'd see a fund or stock that had gone up 50% in the last year and think 'this is the one'. I'd pile in, only to watch it underperform or crash as the hot streak ended. Over and over again. Past performance is not just unhelpful — it's actively dangerous as a guide.

What I Learned

The funds at the top of the performance tables this year are rarely at the top next year. What goes up fast can come down faster. Buy the whole market, accept the market return, and let compounding do the heavy lifting over the long term. Consistent, patient investing has historically been the approach that builds wealth — no guarantees, but the odds favour staying the course.

The Takeaway

What all these mistakes taught me.

Keep it painfully simple
One broad ETF. Regular contributions. Decades of patience. That's the entire strategy. Everything else is entertainment.
Don't panic-sell during a crash
Historically, markets have recovered from major downturns — though past patterns don't guarantee future recoveries. Some investors view downturns as buying opportunities. What I try to do: keep adding when I can, and stay invested rather than reacting emotionally. What you do is your decision.
Ignore the noise
Financial news, market predictions, hot stock tips — I've found it's mostly noise. My simpler approach: buy broad-market funds, keep adding over time, and stay invested. Your circumstances and goals are different from mine — what fits you is your call.
Start when you're ready
Time in the market has historically mattered more than timing — though past patterns don't guarantee future results. Whether and when to start investing is a personal decision based on your circumstances.
Fees matter more than you think
Fee differences compound over decades just like returns do — in the wrong direction. Always check the OCF (ongoing charges figure) before you buy. Small annual differences can become very large sums over a lifetime of investing.

The biggest mistake? Not starting.

Everything I got wrong led me to one approach: simple, consistent, diversified investing. These are the lessons my own mistakes taught me — whether the same approach fits your circumstances is for you to decide. All investing carries risk and you may get back less than you invest.

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Motivational poster showing a hiker at sunrise with text about never giving up, featuring signpost with words Focus, Persist, Succeed

Every mistake is a lesson. Focus. Persist. Succeed.

Important disclaimer

I am not a financial adviser and nothing on this page — or anywhere on this website — is financial advice. I am not regulated by the Financial Conduct Authority.

All investments can go down as well as up and you may get back less than you invest. Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise.

This page shares my personal investing mistakes and what I learned from them. Your circumstances, goals, and risk tolerance are different from mine. Always do your own research and speak to a qualified, FCA-regulated independent financial adviser before making any investment decisions.