Having been in the financial services industry for almost 20 years, I’ve worked with hundreds of clients, spoken with countless prospects and observed a wide range of attitudes and investing approaches.
With easy access to the internet and a multitude of smartphone applications, many do-it-yourself (DIY) investors may feel increasingly confident in their investing abilities.
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If you’re planning to invest on your own without professional assistance, I suggest avoiding these five common mistakes DIY investors make.
1. Following the herd
Investors today are bombarded 24/7 with information, often in the palms of their hands. It’s essential to discern which information is accurate and recognize that not all internet voices share information and advice that’s in your best interest.
If you’ve spent any time on YouTube, you’ve probably noticed ads promoting a service, product or investment thesis.
Unfortunately, it’s easy to fall into the trap of assuming that someone who can produce a professional-looking video is an expert with the best investing tips.
Many individuals have utilized the internet to promote pump-and-dump schemes involving crypto assets, aiming to profit at the expense of unsuspecting investors.
The same can occur with other types of investments, so it’s crucial to listen to reliable, objective research about how to invest and tune out the rest.
2. Trying to time the market
Time and again, we’ve seen DIY investors try to time the market, meaning they attempt to wait until the market dips or rises before buying or selling stocks.
History has proven that this does not work in any repeatable fashion. For example, if you’re investing in an S&P 500 index fund, missing just one or two of the best market days in a calendar year can significantly reduce your total return on this type of investment.
We’ve seen historic swings in 2025, with both upward and downward tariff announcements.
You may feel like a genius if you’re not invested when the market drops — for example, after major tariffs were announced in April 2025.
However, when the news shifted and tariffs were paused, the U.S. stock market surged back into a positive direction, and investors sitting on cash didn’t experience that rally.
Past data also show that investors who pick solid investments and hold them throughout periods of market volatility typically come out ahead compared with those who jump in and out of the market.
For context, in the course of the past 10 years, the S&P 500 has outpaced the historical average, returning an annual average of 13.3% with dividends.
3. Not diversifying adequately, or at all
DIY investors may be tempted to go all in on a small number of investments about which they feel strongly.
For example, some younger investors have recently gone all-in on crypto assets, bypassing the traditional U.S. stock market in hope of exponential returns.
But the general rules of diversification suggest that the fewer assets in your portfolio, the greater the risk. Diversification can involve buying stocks in different sectors of the market, investing globally or holding alternatives or fixed income in your portfolio.
What’s prudent depends on the investor’s time horizon, risk tolerance and investment objective. To put it in perspective, in 2023, the top 10 companies in the S&P 500 contributed more than 85% of the index’s total return.
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Take crypto, for example. It can feel great when an asset such as bitcoin delivers solid double-digit returns and outperforms the stock market.
But that same asset can just as quickly reverse course and potentially go into double-digit losses just as easily, for reasons that are difficult to discern, relative to public markets.
Bitcoin’s price return in 2021 was 59.7%, but in 2022, BTC lost 64.3%. If you’re investing in retirement assets or your nest egg, experiencing these kinds of ups and downs may be dangerous and potentially life-changing (and not in a good way).
4. Not being disciplined about taking gains
Let’s say you’ve chosen a few great stocks, your portfolio has made a lot of money, and you’re feeling good about your choices. What do most DIY investors do? Let it ride, hoping it keeps going up.
However, while it’s true that the stock market fluctuates most of the time, that’s not always the case for individual stocks or companies.
A company could have a great run, then be unexpectedly impacted by a change in government regulations (tariffs, for example) or be blindsided by an unexpected event such as the pandemic.
Knowing when to rebalance or pare your winners is just as important as picking the right investments.
Research has shown that most investors don’t like selling winning stocks, and there might also be a taxable impact if you’re investing non-retirement assets.
I’m reminded of UnitedHealthcare stock in 2025. For many years, UNH had been a strong-performing investment that hadn’t seen negative returns since 2008.
However, over a brief period, its CEO was publicly assassinated and was the focus of government investigations threatened by the new administration, leading to a major pullback in stock price. As of July 2025, UNH’s year-to-date return was -42.3%.
As part of a diversified portfolio, this hit could potentially be minimized. However, any investor with a substantial portion of their net worth in this stock would be feeling the pain, while the U.S. market in general is up about 7% this year.
5. Not having enough patience
Among other things, investing requires patience. That can be hard in this time of constant electronic notifications and instant gratification. Stocks won’t double or triple in value in a week — in many cases, growth happens gradually over time.
DIY investors might want to see quick returns and abandon assets in the “slow and steady” category.
A diversified portfolio with exposure to different markets may not deliver the kind of high double-digit gains seen in the crypto market when times are good, but it may also avoid sharp drawdowns.
It’s also important to remember that periods of heightened market volatility, such as the market drop from April to May in 2025 and subsequent recovery, are part of the process. They require patience and discipline to get through.
This is different than when a stock price drops due to a company suddenly going out of favor or experiencing specific significant business challenges.
Conclusion
Avoiding the noise and not being patient isn’t easy.
Without the help of a financial adviser, it can be difficult to know when to take your gains and how to diversify your portfolio.
If you’ve tried investing on your own without success or simply feel overwhelmed, consider asking a financial adviser for help.
