One thing’s for sure, when you invest, you’re going to make mistakes, so let’s take a look at how you can recover from these lessons. 

A list of some basic mistakes new investors make will help you avoid the most common pitfalls. When you realize you’re on the verge of making a mistake, you can take a step back, regroup, and get back on track to becoming the brilliant, patient, and cool investor you’re meant to be. 

Nothing to do 

There are no guarantees in the market. Except one: if you don’t invest at all, you can’t afford a comfortable retirement. 

It is far more important to be in the market at the right time than to be in the market at the right time. You don’t have to make a big decision regarding your life savings – buy a stock in a company you like. Then you can start thinking about the big picture and start diversifying. 

Short-term investing 

Buying a stock to get started is all well and good, but don’t invest large sums of money that you may need next year. Far too often, beginners put their entire savings into stocks, thinking they can sell them when they need the money again. 

This isn’t a bank account. You may have to sell at a loss if you need money during a downturn. 

Play it safe 

If you’re young, don’t just invest in low-risk, low-return stocks. You have years to ride out the market fluctuations and reap the big gains. 

Older investors don’t have that luxury. You’ve heard the expression “time is money”?” The stock market is no exception. Use your time to your advantage and invest in companies that have the potential for long-term growth. 

Try investing in emerging megatrends like green energy, and look for industry leaders to invest in. 

Play it safe 

Conversely, don’t put all your money into risky companies – especially overvalued stocks without solid business models or sound leadership. 

Spread the risk across a few companies and sectors to hedge against downturns, and keep your portfolio balanced with a few underlying stocks of larger companies. 

Follow the crowd 

We’d all be millionaires if following the crowd worked. 

There will be times when every fiber of your being tells you to sell a stock you still believe in because of a temporary dip. A bad earnings report here and there isn’t the downfall of a great company. 

Stock prices rise and fall – stick with it, and over time you’ll reap the rewards of a long-term investment strategy. If you keep changing your mind, your returns will be eaten up by trading fees. 

Remember how to recover from mistakes you’ve made in investing: 

• Investing is a lifelong process filled with mistakes. 
• Learn from your mistakes or you’ll never be a great investor. 
• The biggest mistake you can make is to do nothing.