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5 Investing Mistakes That Can Cost You Thousands

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Want to build wealth? Then you need to avoid these five costly investing mistakes—because even a small mistake can set you back years. Stick around because at the end, I’ll share an action plan to help you invest smarter starting today!

Mistake 1: Timing the Market

What it is: Trying to predict market highs and lows instead of consistently investing.

Global Market Example:

  • Many people panic-sold their stocks during the 2008 crash or COVID-19 dip—only to see the market recover and hit all-time highs later.
  • A $10,000 investment in the S&P 500 in 2009 would be worth over $50,000 today. Those who stayed out missed massive gains.

Canadian Market Example:

  • Investors who panic-sold Shopify (SHOP.TO) when it dropped in 2022 missed its recovery in 2023.
  • The TSX Index has consistently grown over time, despite recessions.

Philippine Market Example:

  • Many people exited Jollibee (JFC.PSE) and SM Investments (SM.PSE) during the pandemic crash, only to see them rebound.
  • The PSE Index has always recovered after economic downturns.

🚀 Action Item:

  • Use Dollar-Cost Averaging (DCA)—invest a fixed amount regularly, no matter the market condition.
  • Set up automatic investments in index funds or ETFs to avoid emotional decisions.

Mistake 2: Not Diversifying

What it is: Putting all your money in one stock, one industry, or one asset class.

Global Market Example:

  • Investors who put everything in Enron, Lehman Brothers, or FTX lost everything.
  • Tech stocks like Meta (META) and Tesla (TSLA) have high growth but also high volatility.

Canadian Market Example:

  • Many Canadians over-invest in real estate, ignoring stocks and bonds.
  • Investing only in big banks (RBC, TD, BMO) without diversifying into tech or energy can limit growth.

Philippine Market Example:

  • Filipinos tend to invest only in real estate or local stocks, missing out on global opportunities like U.S. ETFs or crypto.
  • Over-reliance on a single sector like property or retail can be risky.

🚀 Action Item:

  • Follow the Rule of Three: Invest in at least three different asset classes (stocks, real estate, bonds, or alternative investments).
  • Use ETFs like VT (global stocks), XIC (Canada), or FMETF (Philippines) for diversification.

Mistake 3: Ignoring Fees

What it is: Paying high fees on mutual funds, trading platforms, or financial advisors.

Global Market Example:

  • Many mutual funds charge 2-3% annual fees—which can eat up 40% of your total returns over decades.
  • ETFs like Vanguard’s VOO (0.03% fee) vs. actively managed funds (2% fee) show how fees impact long-term gains.

Canadian Market Example:

  • Many Canadians invest in high-fee mutual funds when low-fee ETFs like VCN or XIC offer the same exposure.
  • Trading commissions on big banks like RBC Direct Investing can be high compared to Wealthsimple Trade (zero-commission).

Philippine Market Example:

  • Some Filipino investors buy mutual funds with high management fees instead of low-cost index funds.
  • COL Financial and BPI Trade have lower fees than traditional fund managers.

🚀 Action Item:

  • Check the Expense Ratio (ER) of any fund before investing—aim for under 0.50%.
  • Use zero-commission brokers like IBKR (global), Wealthsimple (Canada), or COL Financial (Philippines).

Mistake 4: Selling in a Panic

What it is: Selling investments out of fear during market downturns.

Global Market Example:

  • People who sold Bitcoin in 2018 when it crashed missed out on the 2021 bull run.
  • The dot-com bubble saw many investors sell tech stocks—those who held onto Amazon (AMZN) became millionaires.

Canadian Market Example:

  • Investors who sold Canadian banks during past recessions missed their consistent dividend growth.
  • Those who dumped Shopify (SHOP.TO) in its dip lost out on its rebound.

Philippine Market Example:

  • Many sold Ayala Land (ALI.PSE) or SM Prime (SMPH.PSE) during COVID-19, only to see them recover.
  • The PSE Index always rebounds over time—selling in a crash locks in losses.

🚀 Action Item:

  • Set an investment thesis before buying: If nothing changes fundamentally, don’t sell out of fear.
  • Use stop-loss orders to limit risk, but avoid panic selling in short-term dips.

Mistake 5: Not Having an Exit Plan

What it is: Holding investments forever without a strategy for when to take profits or reallocate funds.

Global Market Example:

  • Smart investors took profits in Bitcoin at $60K and reinvested in safer assets before the crash.
  • Venture capitalists exit startups once they hit peak valuation (e.g., selling Uber or Airbnb at IPO).

Canadian Market Example:

  • Real estate investors sell pre-construction condos before full completion to lock in profits.
  • Some investors sell dividend stocks once they stop increasing payouts.

Philippine Market Example:

  • Many investors don’t know when to sell—they hold Jollibee or Ayala stocks for years without rebalancing.
  • Smart investors sell when fundamentals change (e.g., economic slowdown, company mismanagement).

🚀 Action Item:

  • Set clear exit targets:
    • Stocks: Sell 20-50% after a 100% gain and let the rest ride.
    • Real estate: Reinvest profits into higher-yield properties.
    • Crypto: Take profits when up 3-5x to secure gains.

Now that you know these five investing mistakes, which one have you made before? Drop a comment below! If you found this valuable, hit the like button and subscribe for more smart investing strategies!