What are the biggest mistakes beginner investors make?

The expensive mistakes are all behavioural, not analytical. The biggest is not starting, usually while waiting for more knowledge, more money, or a better moment. Every year of delay is a year of compounding lost, and it is the one mistake you cannot fix later.

Second is trading too much. New investors check prices daily, react to every move, and buy and sell far more than they should. Each trade costs a little in spread and taxes, and the timing is usually wrong: buying after a rise, selling after a fall. The data on this is unambiguous. The more active the individual investor, the lower the return.

Third is concentration: too much in one stock, often an employer’s or a favourite company. It feels like conviction and it is a single point of failure. Fourth is selling in a downturn, converting a temporary loss into a permanent one, usually near the bottom. Fifth is taking tips, from a friend, a forum or a video, without understanding the business.

The fix is unglamorous. A broad index fund removes the stock-picking risk. An automatic monthly contribution removes the timing decisions. And a rule to not look at the account more than once a month removes most of the temptation to trade.