In today’s article we are going to be discussing seven common investment mistakes to avoid. Investing is a great way to increase your wealth and work towards your desired lifestyle and future financial objectives.

But it’s by no means a smooth process, and many investors can make mistakes that can ultimately be very costly.

So what should you avoid doing in order to make the most of your investments and stay on course to achieve your goals?

Avoid Putting All Your Eggs in One Basket

As a Chartered Financial Adviser, the first mistake I see time and time again when helping new clients that have not had advice in the past is putting all their eggs in one basket.

If you limit your investments to one share, market or industry, you could be particularly vulnerable if it experiences any shocks or volatility. For example, Tesla shares in November 2021 peaked at $407 by January 2023 they were $109. That’s a fall of 73%. If this is the only asset you hold, that’s a big reduction in your wealth, if this is a small part of a well diversified portfolio, it would only have a limited impact on your wealth.

With that in mind, it’s a good idea to diversify your portfolio across a variety of assets and markets, so you’re exposed to less risk and better able to withstand any economic or market difficulties.

Don’t be Guided by Your Feelings

Now that you have a well diversified portfolio, the second mistake to avoid when investing is don’t be guided by your feelings. Emotions can run high as you monitor the progress of your investments, particularly if the areas you’ve invested in start to plummet. It’s easy to be overcome with fear and panic, so you decide to pull out of the market and sell your stocks.

But markets go up and down all the time, and they historically have always recovered even after the biggest of shocks.

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

Avoid Trying to Time the Market

Another common mistake to avoid is trying to time the market, Market fluctuations are a constant companion for investors, and it can be very hard to anticipate which way it will go in the coming days, weeks and months. That’s why it’s a mistake to be trying to time the market, as you could end up missing out on the chance to earn higher returns and selling at a loss.

Again, you should be sticking to your long-term investment strategy and goals, rather than acting impulsively. We previously provided a blog on this topic in detail with some great charts and statistics on why trying to time the market is almost impossible to do and how getting this wrong can hugely impact your overall returns. This can be found here, in Should I Switch to Cash?

Avoid is Working with the Wrong Investment Adviser

Again another crucial mistake to avoid is working with the wrong investment adviser. Getting the right advice is essential if you’re going to be a successful investor, so make sure you turn to a professional, regulated adviser who will act in your best interests.

Not Thinking Long Term

As I’ve stressed throughout my blogs and podcasts, you need to adopt a long-term strategy to investing, so it’s important to be willing to give your investments time to grow. With that in mind, don’t tear yourself up by checking market movements on a daily basis. 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 over multiple years to today, you’d end up with a much straighter line, ideally heading upwards.

Not Setting Clear Goals

My last mistake to avoid, is not setting clear goals. Without a clear goal, how can you establish how much you should be saving or what risk you should be taking. How can you determine whether your investments and savings strategy are successful if you have a clear idea of what you want to achieve. Setting defined goals from the outset, allows you to measure whether or not you’re on course to reach them.

What Should I Do Next?

What Should I Do Next?

I’m sure you will now be thinking “Can Howard Wright Help me with my Investment Portfolio? Investing isn’t as simple as it initially seemed.

I hope I’ve managed to help you understand some of the key things to consider when investing as we don’t want you to end up making unnecessary mistakes.

The best way to contact me and our Chartered Advisers to book your discovery meeting is to fill in our enquiry form or phone us on 0345 688 4939 we will then be able to book in a call at your earliest convenience.

Thank you for taking the time to read this article and we look forwards to seeing how we can help.


This article contains information from sources believed to be reliable but no guarantee, warranty, or representation, express or implied, is given as to its accuracy or completeness.  Howard Wright Ltd does not undertake any obligation to update or revise any future statements.  Past performance is not a reliable indicator of future results. Investments can go down as well as up and actual results could differ materially from those anticipated. This article is for information purposes only and has no regard to the specific investment objectives, financial situation or particular needs of any person as such, the information contained in this article is not intended to constitute, and should not be construed as, investment or financial advice.  Appropriate personalised advice should be taken before entering into any transactions.  No responsibility can be accepted for any loss arising from action taken or refrained from based on this publication.  Howard Wright Ltd is Authorised and regulated by the Financial Conduct Authority.  

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