Investing can often be a game of “winning by not losing”. You need to know what not to do. And by you I mean we.

So here are 10 ways to be a terrible investor.

10. Ignore your own risk tolerance

If you take on more risk than you’re comfortable with, you might panic and sell at the worst times. Don’t back yourself into a risk corner!

One study found that 54% of investors who pushed beyond their comfort zone ended up selling at a loss when the market dropped.

9. Believe everyone else is the “Greater Fool”

Believing you can flip overvalued assets for a profit to someone else can backfire.

During the 2008 financial crisis, this mindset fueled the housing bubble. When prices fell by around 33%, many people were left with massive losses.

8. Chase returns

Moving your money into whatever’s hot at the moment often means buying high and selling low.

Research shows investors who chase the latest winners usually earn about 1.5% less per year than if they’d stayed put.

7. Don’t pay attention to fees

Over time, fees take a huge bite out of your returns.

Even a 2% yearly fee can shrink a portfolio’s final value by around 40% over 25 years compared to a cheaper option.

6. Focus on the short term

Making decisions based on day-to-day market swings can hurt your long-term goals. Plus, it’s super stressful! Zoom out.

Studies show that people who constantly jump in and out often underperform the market by 4-6% each year.

5. Let emotions rule your decisions

Fear and greed (and loathing in Las Vegas) can push you to buy or sell without thinking it through.

Emotional investing has been shown to reduce average returns by about 1.8% a year compared to the market overall.

4. Don’t diversify

Putting all your money into one stock or sector can lead to huge losses if that area tanks.

During the 2000 dot-com crash, some tech-heavy portfolios lost more than 80% of their value, while more balanced portfolios fared much better. More recently, US stocks returned 27% in 2021 and -20% in 2022.

Check out this chart from BlackRock (pictured below) showing the returns of different kinds of investments over the past 10 years.

3. Rely too much on economic gurus

Many “expert” predictions don’t come true.

Research suggests forecasts are only right about 40% of the time, so depending on them can be risky.

2. Trade all the time

Constant trading racks up transaction costs and often leads to buying high and selling low.

Studies show frequent traders underperform the market by around 6.5% per year.

1. Think you can time the markets

Predicting exact highs and lows is nearly impossible. So why bother?

People who try usually earn about 3.5% less per year than those who just buy and hold, often missing the market’s best days.