Avoiding 8 Common Mistakes for Beginner Investors: Lessons Learned from 10 Years of Experience

by | Sep 16, 2023 | Fidelity IRA | 34 comments

Avoiding 8 Common Mistakes for Beginner Investors: Lessons Learned from 10 Years of Experience




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There are 8 key tips that we go over in this video. Enjoy and comment below your favorite tip.

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Timestamps:
0:00 – Intro
0:18 – Starting a Roth Earlier
2:02 – Matching Holdings to Risk Profile
5:30 – Find Your Investing Style
7:04 – Which Account is Best
8:39 – Contribute More to Retirement
10:19 – Find Low Fee Funds
11:14 – Diversification Opinions
13:36 – Resource Matrix

PS: I am not a current Financial Advisor, any investment commentary are my opinions only. Some of the links in this description are affiliate links that I do receive a commission for & they help support the channel!…(read more)


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8 Beginner Investing Mistakes I’ll Never Make Again (After 10 Years of Experience)

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Investing can be a daunting task, especially for beginners who are just starting out on their journey towards financial freedom. However, with time and experience, one can learn from their mistakes and avoid repeating them in the future. In this article, we will highlight eight investing mistakes that I, personally, will never make again after 10 years of experience in the field.

1. Not Having a Plan: One of the biggest mistakes beginners make is investing without a clear strategy or plan. It is essential to have a well-defined investment plan that outlines your financial goals, risk tolerance, and investment horizon. Without a plan, you may end up making impulsive decisions that can prove detrimental to your portfolio.

2. Chasing Quick Profits: In search of quick gains, beginners often fall into the trap of chasing hot stocks or market trends. Jumping on the bandwagon without conducting thorough research is a grave mistake. Instead, focus on long-term investment strategies and look for companies with strong fundamentals and growth potential.

3. Neglecting Diversification: Concentrating your investments in a single stock or sector can be incredibly risky. A diversified portfolio reduces your exposure to any one specific investment and spreads the risk across different asset classes. By diversifying, you can minimize the impact of potential losses and increase opportunities for returns.

4. Overtrading: Many beginners have a tendency to buy and sell stocks frequently, believing that it will increase their chances of making money. However, excessive trading can result in high transaction costs and short-term capital gains taxes, eroding your overall returns. It’s important to be patient and stick to your long-term investment plan.

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5. Ignoring the Power of Time: Compound interest can work wonders for your portfolio when given enough time. As a beginner, it’s crucial to start investing early and stay invested for the long run. Delaying investment decisions or trying to time the market can significantly reduce your potential returns.

6. Failing to Analyze Risk: Risk is an inherent part of investing, and understanding and managing it is crucial. Beginners often overlook the risks associated with different investments and fail to conduct proper risk assessments. It’s important to evaluate the risk profile of your investments and understand how they align with your risk tolerance and financial goals.

7. Emotional Investing: Making investment decisions based on emotions rather than logic can lead to poor outcomes. Beginners often panic during market downturns and sell their investments at a loss or buy stocks at their peak due to fear of missing out. It’s critical to keep emotions in check and make rational decisions based on thorough analysis and research.

8. Not Seeking Professional Advice: It’s easy for beginners to get overwhelmed with the vast amount of information available, leading to analysis paralysis. Seeking professional advice from financial advisors or investment experts can provide valuable insights and help beginners navigate the complexities of the investment world.

In conclusion, investing can be a rewarding journey if done wisely. By learning from past mistakes and avoiding these common pitfalls, beginners can set themselves on the path to successful investing. Remember to have a plan, diversify your portfolio, stay disciplined, and seek professional advice when needed. With time and experience, your investing journey can become more fruitful and financially rewarding.

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34 Comments

  1. Humphrey Yang

    Hey all! Really proud of this video, if you enjoyed it make sure to leave a comment and also scroll back up right now and subscribe.

    Seriously. I see you.

    Scroll up.

    Subscribe.

    Do it.

  2. Nick

    Very well articulated; I wish I had more time for trial and error, but I'll be 56 in October and I need ideas and advice on what investments to make to set myself up for retirement, my goal is to have a portfolio of at least $500k at the age of 60.

  3. Dylan Moris

    Investing in alternative income streams that are independent of the government should be the top priority for everyone right now. especially given the global economic crisis we are currently experiencing. Stocks, gold, silver, and virtual currencies are still attractive investments at the moment.

  4. Michael Carr

    Why do most advisors or other finance channels not discuss HSA investing?

  5. Marco Romeo

    The year is almost over and very glad about the decisions I have made so far. Investing in the market earlier this year regardless of the market conditions has saved my life. I made over 70k USD with a start of 25k in the last 7 months. I know it's nothing compared to what others make but I'm glad I'm changing my finances.

  6. charlotte pauline

    This is quite educational. It's crucial for newcomers to keep in mind that the financial markets are highly irrational in the short run. You should constantly be ready for the unexpected. That is how chance operates. Because of the inherent risks in the market, I always favor long-term investments.

  7. my doan

    I just opened my IRA account couple weeks ago and don't know much about it, I'd been watching ur video to learn more, Is traditional IRA account and Advisory IRA account is the same? On my bank showing two different accounts, and Advisory IRA tax deduction too? Thanks and very appreciated you

  8. Natural Beauty

    I bought schd, vym, vti, fdvv, dgro

  9. Lancey Roche

    One thing i can say that helped me in life to reach my first million was starting early and avoiding debt, i got curious and informed i became open to passive income, investments in equities , etfs and the likes. also sought help to handle my portfolio which was my foundation. i'm ever grateful to Lisa Rosa Cavanagh my FA.

  10. o0usf0o

    my roth is basically all growth etfs…. got 25 years to let it compound

  11. Matthew Holliman

    Why do you consider real-estate to be more risky?

  12. Amanda Louise Medford

    As a new investor, it's important to remember that investing and trading require more than just technical analysis skills. Discipline and emotional maturity plays a significant role in achieving success. It's wise to keep in mind the adage of "time in the market vs timing the market," as this mentality can help you weather market volatility. With insights of my financial advisor Robin Brezik and my commitment to learning growth, I've increased my earnings in just a few months. You too can do same.

  13. Kelly jane

    I started investing when I was 27, mostly through sweat equity. I just turned 33, and this last month was the first time that my passive income broke $100,000 for the month. This is solid advice! DO IT

  14. Brandon Kalusa

    Are target date funds worth it for the fees?

  15. Bobby Blue

    The current market/economy is unnecessarily tougher for boomers/senior citizens, I’m used to just buying and holding assets which doesn’t seem applicable to the current rollercoaster market plus inflation is catching up with my portfolio of $2m. I’m really worried about survival after retirement.

  16. Benson christopher

    “There’s more and more of a concern that incoming data is revealing that the Fed might be a little bit behind the curve than maybe they expected heading into this year,” said Bipan Rai, North America head of FX strategy at CIBC Capital Markets in Toronto. In my portfolio, I'm noticing more red than green. How are other people in this market raking in over $350k gains within months

  17. Ian Scianablo

    Hey Humphrey. Love your wonderfully informative videos. I'm starting my new job in 2 weeks. But I'm NOT that far away from "retirement" and I'm starting my first ROTH IRA. Is that fund protected, in case I get hit with huge health care bills in the next few years? Do I have to classify it as "retirement" fund and not touch it? Even after retirement age? Afraid if I get sick and health care costs demand I raid the account? I'm starting my ROTH IRA VERY late in life but I do NOT want to touch it! Thank you Humphrey.

  18. William Ethan

    Nobody can become financially successful over night. They put in background work but we tend to see the finished part. Fear is a dangerous component, hindering us from taking bold steps we need in other to reach our goals.

  19. Stephen Potter

    I've had a hard time trying to master the lesson of knowing the right time to enter the market. I have set aside $87k to go into this market, but I'm not really sure I have a clue how the market actually works.

  20. CVC Foundation

    All these videos and years of investing and you’re not even wealthy is great reason to not subscribe. Just a wannabe YouTuber

  21. John Chang

    Roth gains are tax free, but Roth losses are not deductible

  22. CHOI WOOK

    Intriguing insights! Esteemed voices within the financial realm have been expressing their viewpoints on the seriousness of the impending economic downturn and the potential extent of equity downturns. This is tied to the economy's course towards a recession and the sustained inflation surpassing the Federal Reserve's 2% target. As I aim to build a portfolio exceeding $850,000 before reaching 60, I would greatly appreciate any guidance on prospective investment avenues.

  23. Drew

    I started my Roth this year and started off too conservative too but realized it and now my biggest holding is Apple.

  24. MOKUTON 07

    Only Wixpool offers good returns from investments in DEX platforms on reliable networks like Bitcoin. And I dont see the point of working with risky assets…

  25. persie PRINCE

    Xlk 50%
    Xlv 20
    Slyv smallvalue 30%
    Beating the s&p from 2000 till now
    I don't like financials that why not voo and chill,so that's like a cheat code for the s&p

  26. tomasarson

    Microsoft. Apparently a bad or not mentionable investment.

  27. Jerry Nguyen

    Do you still have fundrise investment?

  28. Blu-ray Benn

    Your comparison between HD and AT&T is only taking into consideration the stock price, even though AT&T has made way fewrer gains over the same period, it has given way more dividends, you need to include this when comparing stocks over a long period of time.

  29. Faz

    Any reason you prefer a Roth IRA vs a Roth 401k?

  30. Shaylin Vickers

    I am 42 years old and also a single mom, I have two young kids and presently I have no investments in my name and no retirement plans in place yet. I work 2 jobs, and I have saved significant amount of capital that is required to start up investments but I have no idea what strategies and directions I need to approach to help me make excellent returns. I do not want to lose my capital, I need help.

  31. Jiya Davies

    I'm looking for growth, dividend, and cheap to hold like SCHD…but in the S&P 500. I currently have 230K in SCHD (adding 7,500 annually into a ROTH forever) and just starting a position in QQQM when it comes back down to earth. Interested in a 3 fund ETF strategy… thoughts?

  32. SafetyThird

    I can't understand why anyone would buy VEU

  33. Albert Rivera

    The order of contribution I would suggest is:

    Maximize 401k match
    Maximize Roth IRA
    Maximize HSA
    The max your 401k if it’s Roth.
    Then your brokerage or traditional 401k if your company has great low cost funds. funds.

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