Investing mistakes not only cost you money, but they also make you feel defeated.

And when your pockets and mind are rattled, it leaves opportunities for even more costly mistakes.

Yet, when you are first getting started in investing, there are a lot of common mistakes you’ll make. It can be a great learning experience, but you still want to minimize potential losses that set you back.

Even investing experts occasionally make mistakes, it’s a part of the process.

However, to help you on your investment journey, I’m sharing with you the worst investing mistakes most beginners make. Consider this the main list of what not to do when investing.

And trust me, I made most of these below blunders myself, but hopefully these stick in your mind as you get started.

Trying to Time The Market

The stock market goes up, the stock market goes down. You’ll also read and hear many financial experts making predictions about when to buy or when to sell.

But it applies to other investing markets too, not just the stock market. Either way, 99% of the time those financial experts are wrong.

The stock market of course , has some patterns and historical data that can be helpful signals. But that does not always mean the market will do what you think.

One of the common investing mistakes beginners make, is trying to time when to buy, sell, or look for ways to make fast cash. Day trading or trying to time the market is highly risky and can quickly cause you to go broke.

There are certainly some successful people in the day trading space, but most have years of trial and error.

Instead, you should be dollar-cost averaging, slowly add to your portfolio over time, and let your money go to work.

Not Researching Before Investing

You’ll come across tons of articles, emails, and TV personalities talking about stocks to pick or where you should invest your money.

While there might be some interesting information, always do your research before investing.

Most of the email newsletters of stock picks are paid promotions by the company to pump up the stocks worth.

After the hype, you’ll see a stock come crashing down. Sometimes called a “pump and dump.”

Unfortunately, many beginners to investing fall victim to this, because they are not researching.

Do not blindly trust recommendations and follow others without understanding what you’re investing in. It goes with real estate, businesses, art, anything.

DO YOUR HOMEWORK.

Not Diversifying Your Investment Portfolio

Everyone’s investing goals, current situation, and status is different. So your investment portfolio and choices are probably unique from the next person.

But one commonality that every investor should have is that they are diversifying their investment portfolios.

By putting all your money in one area, you put yourself at extreme risk. Sure, it might be doing well for awhile, but it can quickly crash and burn.

When you invest, you should be looking at different assets and in different sectors that can weather against downturns and help your portfolio stay balanced.

For instance, I have a mix of stocks, bonds, and some real estate stock in my retirement accounts, as well as some non-us stocks.

If I was all in on just U.S. stocks and the market went down, I’d take a big hit. But have some other assets to help minimize loss.

Others may explore mixing in real estate properties, gold and silver, or other alternative investments. Again, these are tailored to your specific financial goals.

Extra: If you have an employer sponsored 401k, it might also be a good idea for you to get a free portfolio analysis from Blooom. They’ll analyze your current portfolio and provide recommendations to help you diversify and get on track. : If you have an employer sponsored 401k, it might also be a good idea for you to get a free portfolio analysis from Blooom. They’ll analyze your current portfolio and provide recommendations to help you diversify and get on track. Get started for free here

Thinking Investing Will Make You Rich Quick

Investing can be exciting and it feels good to put your money to work. Out of these investing mistakes, many who are just getting started are looking to get rich quick.

There is always a chance you make some good money quickly, but your mindset needs to shift to a long-game approach.

Building wealth can take time, but your money can exponentially start to grow over time due to compound interest and growth of markets.

If you start to come across hot stock picks or investment opportunities that sound too good to be true, usually they are. And now it’s more like gambling than investing.

Investing Too Much Money Before You Are Ready

Not everyone at the start will have a decent amount of money to invest, but even if you do, start slowly.

When you are first learning, even armed with some of this knowledge, you still will make some investing mistakes.

It’s great to learn from, but you also what to ensure you aren’t losing thousands of dollars. If you are investing on your own outside of a company 401k, start off small and work your way up to bigger investments.

For example, while I had a company 401k back in 2014, I also started learning on my own with Vanguard. Granted, I didn’t have much to invest, but I added $500 in and left it. I did not add more for almost two months and when I did, it was only $100 at a time for awhile.

Even when I had more money saved and was learning, I still worked my way up until I felt comfortable with my knowledge and investment choices.

Expecting Zero Risk, Even When Diversified

Even if you have someone helping you and/or you are well diversified, don’t expect to have zero investing risk.

No matter how good your portfolio and decisions are, there will always be ups and downs in stock market, real estate prices, etc.

You need to understand going in that there is always a chance to lose money, have downtimes, or experience some wild markets (like stock corrections or bear markets).

By coming to terms with this, sticking to your plan, and staying focused on long-term investing goals you’ll learn to avoid the “Selling low, buying high” trap.

I’ve fell into that trap, even when I knew better. It happens.

You get nervous when stocks are plummeting and everyone in the media is writing about doom and gloom. But, if you train yourself to drain out the noise and keep investing, you’ll be fine.

There are certain times you may want to be more cautious and leave some cash on the sidelines, but most times you’ll want to hold your positions and keep going.

Not Knowing Why You Are I nvesting

If you don’t know why you want to invest your money or why you currently are, you can set yourself up for failure. Why?

If you don’t know, then you probably do not care too much either. Create some goals for your current and future finances.

Is your purpose to have assets for the future, accelerate towards retirement, make passive income from your dividends, retire early? Then you should also have a plan in place.

What assets are going to get you to your goals, how much can you afford to risk currently, what and where are you investing in.

Those goals and your plan can change overtime too, which is perfectly fine! My own investment plan is certainly different now, than five years ago when I first started.

The whole point is too keep you on track, engaged with your investments, and be more prepared in your choices.

Final Thoughts

Over the last few years of investing on my own, many of the above investing mistakes I did too. But, I also learned a lot over these years.

Hopefully if you are just getting started with investing, you take these seriously because it can save you money and many headaches.

But remember, if you do slip up, it’s okay!

Be patient and continue to learn about any investing mistakes you do make. Before you know it, you’ll be an avid investor bettering your financial future.

What investing mistakes have you made in the past or more recently? What are some others that beginners should try to avoid? Let me know in the comments below.