A 2025 survey from the Federal Reserve Bank of Philadelphia found that 57% of people don’t personally own stocks. The most common reasons? Lack of funds and a lack of knowledge.

Investing can be a powerful way to grow your money over time, but we get it: Getting started can feel completely intimidating, and it’s not the priority when you’re living paycheck to paycheck. Knowing the common investing mistakes to watch for makes the whole thing a lot less scary.

The good news is that many investing apps now let you get started with as little as $1. Heck, you can even start investing with your spare change! And when it comes to building your confidence, you don’t need to be an expert. You just need to avoid common investing mistakes that can quietly hurt your returns.

This guide will walk you through the most common investing mistakes people make and show you how to avoid them so you can feel more confident putting your money to work.

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14 Common Investing Mistakes (That Are Totally Avoidable!)

Below are some of the most common investing mistakes beginners (and even experienced investors) make. The best part is that every one of them is totally avoidable with a little planning and the right mindset.

1. Not Doing Enough Research

The first mistake new investors make is not doing enough research about investing. They’re confused with all the terms and lingo and don’t know where to start. This can lead to avoidable mistakes and money lost from poor decisions. 

A great place to start is KashKick’s Beginner’s Guide to Investing. In this article, you’ll learn all the investing terms you need to know, along with what types of investments you can make and how to get started.

2. Not Having a Clear Investment Plan

One of the most common investing mistakes is jumping in without a plan. Investing without knowing your risk tolerance, time horizon or investment goals can lead to panic selling or reckless buying.

Before you invest, ask yourself:

• What am I investing for? Retirement, travel, a home, extra income?
• How long can my money stay invested?
• How much risk am I comfortable with?

Having a simple plan keeps your decisions consistent and helps you avoid emotional reactions when markets fluctuate.

3. Investing Without Specific Goals

Closely related to planning is goal-setting. Without clear goals, it’s easy to chase trends instead of progress.

For example, short-term goals should not be invested the same way as long-term retirement funds. One of the biggest investing mistakes is putting money you need soon into volatile assets that could drop in value when you need them most.

But one goal comes before all the others: a cash cushion. If a surprise car repair would force you to sell your investments at the worst possible moment, build a small emergency fund first. Even a few hundred dollars of buffer means your investments get to stay invested, which is the whole point. 

Not sure where to start? Here’s how to build an emergency fund from scratch.

Clear goals help you make smarter investment decisions and stay patient.

4. Putting All Your Eggs in One Basket

Another mistake to avoid? Making all the same types of investments. 

Diversification means spreading your money across different investments, such as stocks, bonds and other asset types. That can help reduce the impact if one investment or part of your portfolio performs poorly.

“Because assets perform differently in different economic times, diversification smoothens your returns,” Bankrate reports. “While stocks are falling, bonds may be rising, and CDs remain stable.”

5. Setting Unrealistic Expectations

With investing, you can’t expect fast, guaranteed returns. Social media and headlines can make investing look like a shortcut to instant wealth, but real investing is usually slow, steady and long-term.

When investors expect big wins quickly, they’re more likely to take unnecessary risks, jump in and out of investments, or panic when the market dips. Instead of chasing huge gains, focus on consistent, long-term growth. 

Realistic expectations help you stay patient, avoid emotional decisions and build wealth in a healthier way.

6. Chasing Past Performance

Something else that will hurt your investments is trying to duplicate results. Relying on past results to be today’s investment winnings is like expecting lightning to strike in the same place twice—thrilling, but highly unlikely. 

Investment markets are fluid and always changing, so don’t chase the past. Keep up with market trends and keep your investments fresh.

7. Making Emotional Decisions

In the investing world, you don’t want your heart running your decisions. We’ll leave that to your brain. 

Emotional decisions have no place in investing. Emotional decisions in investing often lead to buying high and selling low, hurting your overall investments and costing you money.

Your decisions need to be logical and calculated to achieve the best possible results.

8. Timing the Market

Timing the market means predicting when it will hit highs and lows, but doing so consistently is nearly impossible.

So what should you do instead? Dollar-cost averaging. That just means investing a set amount on a set schedule, like $50 every payday, no matter what the market’s doing.

When prices are low, your $50 buys more shares. When prices are high, it buys fewer. You never have to guess the right moment, because you’re buying at every moment. It also takes the emotion out of the decision, which quietly fixes a couple of other mistakes on this list.

9. Constantly Buying and Selling

Another common investing mistake is trading too often. Although it may feel productive, frequent buying and selling can:

• Increase fees.
• Trigger taxes.
• Reduce long-term returns.

Successful investors usually focus on long-term growth instead of reacting to every market move (see: mistake No. 8). Sometimes, the smartest move is simply letting your investments work over time.

10. Not Rebalancing Your Portfolio

Similarly, failing to rebalance your portfolio is one of the most overlooked investing mistakes.

Over time, your best-performing investments can grow to take up a larger share of your portfolio than you originally intended, potentially exposing you to more risk than you’re comfortable with.

Rebalancing helps maintain your desired risk level and keeps your investments aligned with your goals. A common approach is to review your portfolio once or twice a year.

11. Ignoring Fees

Did you know that fees are involved when using some investment products? We’re talking about brokerage fees, expense ratios and trading fees. Fees vary by investment and platform. They can include expense ratios, trading fees, advisory fees and account fees. Even small costs can add up and reduce your returns over time.

Pay attention to what you’re paying so unnecessary fees don’t eat into your returns.

12. Forgetting About Taxes

Investment income and gains can be taxable, so it’s important to consider taxes when you invest. 

Taxes on investments depend on the type of account and what you earn or sell. In a taxable brokerage account, selling an investment for a profit can create a capital gain. Investments held for more than 1 year may qualify for long-term capital gains rates of 0%, 15% or 20%, depending on your taxable income. Short-term gains are generally taxed at ordinary income tax rates, according to Investopedia.

Tax-advantaged accounts work differently. Traditional and Roth 401(k)s and IRAs can offer tax benefits, but the rules depend on the account type and when you withdraw the money.

13. Ignoring Inflation

Inflation means your money buys less over time as prices rise. One common investing mistake is focusing solely on how much your investments grow, without considering how inflation affects their real value.

For example, if your money earns 3% in a year but inflation is 4%, you’re actually losing purchasing power. That’s why it’s important to invest in assets that have the potential to grow faster than inflation instead of letting your money sit in low-growth options for too long.

Keeping inflation in mind helps you judge whether your returns are actually keeping pace with rising prices. With 4% inflation, $1,000 today only buys about $960 worth of goods next year, so you need your investments to grow faster than that just to stay even.

14. Waiting Too Long to Start Investing

Many people delay investing because they think they need a lot of money to get started. In reality, one of the biggest investing mistakes is waiting.

Thanks to compound interest, even small contributions can grow significantly over time. The earlier you start, the more your money can work for you. Starting small is far better than not starting at all!

Keep Investing Smart

Avoiding common investing mistakes is just as important as choosing the right investments. When you stay educated, diversified and patient, your money has a greater opportunity to grow over time.

If you’re looking to add more room in your budget to invest, KashKick rewards members for playing games, taking surveys, trying new apps and more. KashKick reviewers love the $10 cash out minimum, the quick payouts via PayPal and Venmo, and the overall ease of use. KashKick member Eric earned more than $500 in under a year. That’s plenty to start investing!

Signing up is free.

For another investing resource, check out how to start investing on a fixed income.