The 5 Biggest Investing Mistakes (And How to Avoid Them)

1. Trying to Time the Market

"Time in the market beats timing the market" is a cliché because it's true. Studies show the average investor's returns are significantly below the market average — largely because people sell during downturns and buy during peaks. Invest consistently and stay invested.

2. Letting Fees Compound Against You

A 1% annual expense ratio seems small. Over 30 years on a $100,000 portfolio, it costs $95,000 in lost returns compared to a 0.03% index fund. Fee comparison is one of the highest-impact investment decisions you make.

3. Not Diversifying

Concentrated bets — in individual stocks, sectors, or your employer's stock — add risk without proportional reward. A total market index fund gives you instant diversification across thousands of companies.

4. Stopping During Market Downturns

Market crashes are sales on stocks. Stopping contributions during a 30% market drop is the equivalent of canceling your grocery orders when food prices fall. Stay the course, or ideally, increase contributions.

5. Starting Too Late

The biggest mistake is waiting. A 25-year-old who invests $5,000/year until 35 then stops ends up with more at 65 than a 35-year-old who invests $5,000/year all the way to 65. That's the power of starting early.