Common Mistakes People Make in the Early Days of Their Investment Journey

Every year, investing seems to get talked about more. Reels about index funds, a colleague mentioning stocks over lunch, YouTube videos promising to make you rich by thirty. But in the house I grew up in, nobody used the word invest. My parents did not invest. My uncles did not invest. It was not that investing was seen as bad. It simply was not a thing, the way some households never talk about money at all.

So when I decided to start investing in the stock market, I was not carrying forward anything. There was no family playbook, no uncle to call for advice, no childhood memory of a parent moving money into a fund. As far as I know, I am the first person in my family’s history to try and figure this out. And when you start from zero like that, you do not make one or two small mistakes. You make a lot of them.

So this is what I am doing here. I am writing down the mistakes I made, plainly, so you do not have to repeat them. A few fewer mistakes early on adds up to a better return over time, and a lot less stress along the way.

A quick note on where this is coming from. It is July 2026 as I write this, and I have been investing and trading in the US stock market from Singapore since the end of 2019. That is more than seven years now. Every mistake here is a personal one. The market does not warn you before you make it. It teaches you after, and the lesson only sticks because it cost you something first.

Expecting the market to make you rich fast

Sometimes this comes from a fantasy. You want to become a millionaire overnight, so you stop looking for solid, boring companies and start chasing whatever is moving fast. A meme stock. A rumour on Reddit. A ticker trending on social media for a day. Sometimes it comes from something more real. A bill is due in three to six months. You have a certain amount saved, and you need about three times that amount, so you turn to the market hoping to triple what you have before the deadline arrives. The motivation is different each time, one greed, one genuine pressure, but the math is exactly the same. There is no reliable investment that turns you into a millionaire overnight, or triples your money in three to six months. If it is greed driving you, you are not investing anymore. You are gambling and calling it investing. If it is a bill, cut an expense, find another source of income, negotiate the bill. Do almost anything else before you put your last cash into the market and hope it hits a number on your deadline instead of its own. Wealth building is not overnight. It is slow, unglamorous, and it takes years, not weeks.

Setting targets you cannot control

This one mostly applies if you trade, not just invest. People walk in with a number already in their head. Something like, I will make so much money in so many days. The problem is not the ambition. The problem is that you are setting a target on something you do not control. Compare that to a target like going to the gym three times a week. That is within your control. You decide whether you show up. The stock market does not work that way. Nobody decides whether it goes up on Tuesday. But once you have set a rigid target, the target starts making decisions for you. You take a riskier trade than you should, just to catch up to a number the market was never going to hand you on schedule.

Waiting until you know everything

There is no finish line called knowing everything about the stock market. You can read every book, watch every channel, and you will still not reach a state where you know it all before you invest. Of course, learn the basics first. But do not let learning everything become the reason you delay your first trade, because that day never comes. Your first hundred dollars in the market will teach you more than any book or any YouTube channel. Think of it as your learning cost, not your investment. Put in whatever the minimum your broker allows, and let the market start teaching you.

Not seeing the bigger picture behind the news

On July 19, 2024, a faulty software update from CrowdStrike caused roughly 8.5 million Windows computers worldwide to crash with the blue screen of death. Airlines grounded flights, hospitals lost systems, banks went down. Shares of CrowdStrike dropped hard that week, and plenty of people who held the stock panicked and sold. In October 2025, something similar happened with Amazon Web Services. An outage there knocked out check-in systems for Delta and United, along with a long list of sites and apps that quietly run on AWS in the background. Some investors reacted the same way. Sell first, ask questions later. Here is the bigger picture both groups missed. If one company going down can genuinely stop parts of the world from functioning, that tells you how deeply the world depends on that company. It is not a sign of weakness. It is a sign of how essential the business has become. The stock might drop for a day or a week on panic and headlines, but the reason to hold it, the fact that half the internet needs it to run, did not change. Read the news for what it says about the business, not just for how alarming the headline sounds.

Jumping into day trading before you understand investing

Investing and day trading are not the same skill, and they do not start from the same place. Investing means putting money into a company for years and letting the business grow. Day trading means buying and selling within hours or days, often based on nothing more than a price chart. People skip straight to day trading because it looks exciting and promises fast money. But day trading needs something that investing gives you for free over time. A feel for how the market actually behaves. You need to watch how the market reacts when the Federal Reserve raises interest rates. You need to watch what happens to stocks the morning after a major political announcement, the kind Trump makes on social media at odd hours. You need to see how prices move when a war breaks out somewhere in the world, and how oil prices ripple into sectors that have nothing to do with oil. None of this comes from a course. You learn it by watching the market react, again and again, over real time. Start by investing. Let the years teach you how markets move before you try to trade the movement itself.

Investing money you cannot afford to lose

Some people start putting money into the stock market while they are still living pay cheque to pay cheque, with little or no savings sitting behind them. That is backwards. Work out your monthly expenses first. Multiply that number by six. That is your emergency fund, and it comes before a single dollar goes into the market. (If you want a simple way to work out that number, I built a free financial plan sheet that does the maths for you.) Skip this step, and you feel it in a way you do not expect. The whole point of investing is to build a better life. More financial freedom, more time with family, maybe an early retirement so you can actually be present with the people you love. But when your entire savings sits in stocks, every short-term dip feels like a crisis, because in a way it is one. Mornings change first. You wake up, and before you say good morning to your wife lying next to you, you already have your phone open checking prices. If you wake up at midnight, you check again. Your mood starts following the market. A green day and you feel light. A red day and you carry it into everything else you do. None of this is a malfunction in the market. The market simply goes up and down. That is the process itself. What is broken is that you put in money you could not afford to lose in the first place, so every ordinary dip lands on you like an emergency. Nobody knows when a real emergency will show up. A job loss, a medical bill, a flight home for a family emergency. Build the six-month buffer first, so the market can do its job, and so can your sleep, without your rent depending on either.

Knowing what you personally can handle

Every strategy in the market works for somebody. That does not mean it works for you. You need to be honest about how a trade makes you feel, not just about how good it looks on paper. If you open a short position and cannot sleep that night, checking futures at 2am, shorting is not your cup of tea. It does not matter how solid the setup looked. The stress it costs you is real, even if it never shows up on a statement. The same goes for options, leverage, or anything that can move fast against you. Some people can watch a position swing forty percent and stay calm. Others lose a week of sleep over a five percent dip. Know which one you are before you put money in, not after.

Trying to make every single trade a winner

Not every trade is going to be a profit. That is simply how the market works, and fighting that fact is where the real damage happens. Some people cannot accept a loss on paper. Instead of selling early and taking the small loss, they hold on, hoping the price comes back so the trade can close green. Sometimes it does come back. Often it does not, and a small loss quietly turns into a large one. Trying to protect your win rate ends up costing you more than losing the trade ever would have. The goal was never to win every trade. The goal is to come out ahead once you add all of them up. A trader who takes ten small losses and two large wins can still finish the year in profit. A trader who refuses to lose even once can end up down the most.

Thinking you know everything after two or three months

This sits close to the opposite of an earlier mistake, waiting until you know everything before you start. This one shows up on the other end. A few months in, maybe a few green trades in a row, and it starts to feel like you have cracked the code. You start explaining the market to other people. You increase your position sizes. You skip the research you used to do, because by now you just know. The market has a particular way of humbling people who think this way. Two or three months is not even one full cycle. You have not lived through a real correction yet, or a recession, or a year where nothing you do seems to work. Confidence built on a short winning streak is not knowledge. It is luck wearing a good outfit. Stay a student for years, not months.

Only thinking about the upside

Say a share is trading at 100. You buy 50 shares. You do the maths on the way up. Sell at 120, and that is a profit of 1,000. It feels good to run that number in your head. Being positive is not the problem. The problem is stopping there. Before you buy, do the same maths on the way down. What if the price goes to 80 instead of 120. That is a loss of 1,000, sitting in the opposite direction with the same weight. Can you actually afford that. Not just afford it on paper, but afford it without it changing how you sleep, how you treat your family, or what you can pay for that month. Every trade has two sides. Look at both before you put the money in, not just the one that feels good to imagine.

Going all in on one stock at once

Some people take their entire position and put it into a single stock in a single trade. Ten thousand dollars, one order, done. The problem shows up the moment the price drops. You have no money left to average down, and no choice left except to wait, sometimes for a long time, for the price to climb back to where you bought. Buy in chunks instead. If you plan to build a position of 25 shares, start with 10. If the price dips after that, buy another 15. You are not trying to guess the exact bottom. You are giving yourself room to lower your average cost if the market hands you a better price later. Going all in feels decisive. Buying chunk by chunk feels slow. Slow is what lets you survive the dip instead of just hoping through it.

Buying shares without knowing the business

Some people buy a stock because the ticker is trending, or a friend mentioned it, or the chart looks like it is about to turn up. They never actually find out what the company does. How it makes money. Who its customers are. Whether it is growing, or slowly dying underneath a good-looking chart. If someone asked you to explain, in two sentences, how the company you just bought makes its revenue, could you answer them? If you cannot, you did not buy a business. You bought a lottery ticket with a stock symbol printed on it. Before you buy, read the first page of the company’s investor page. Look at what they actually sell, and to whom. You do not need to read a hundred-page report. You need to know, at minimum, what the company does for a living.

Using high leverage

Some brokers let you trade with 10x leverage or more. It sounds like a shortcut. Ten times the exposure on the same amount of money, ten times the profit if you are right. Nobody explains loudly enough that the same multiplier works against you. At 10x leverage, a 10 percent drop in the stock is not a 10 percent loss anymore. It is enough to wipe you out completely. The market does not need to crash for that to happen. An ordinary bad week can do it. Leverage does not just multiply your gains. It multiplies how wrong you can be, and it does that whether you were paying attention or not. If you are still learning how the market moves, leverage is not a tool. It is a faster way to learn the same lesson at a much higher price.

Not working on growing your capital too

People spend all their energy trying to improve their return percentage and almost none of it thinking about the size of the pile that percentage applies to. Ten percent on a thousand dollars is a hundred dollars. Ten percent on a million dollars is a hundred thousand dollars. Same skill, same percentage, same effort in reading the market. A completely different outcome, because the capital behind it was different. Getting better at picking stocks matters. So does your job, your savings rate, and how much fresh money you add to your account every month. A great trader with a small account is still working with a small account. Grow the number you are applying your percentage to, not just the percentage itself.

No diversification

Some people put all their money into one stock, or one industry, or one country, without noticing they have done it. You can hold ten different companies and still have zero diversification if all ten are tech companies, or all ten are Singapore banks. When that one sector has a bad year, your entire portfolio has a bad year with it, at the same time, for the same reason. Spread it out. Tech, healthcare, energy, banking, consumer products. Different countries too, not just different tickers within the same market. The point is not to avoid risk altogether. The point is to make sure one bad headline about one industry cannot take down everything you have built. If a single sector crashing would wipe out most of your portfolio, you were never really diversified. You were just spread across a few names that all move together.

Trusting random YouTubers because they sound like they know what they are talking about

A confident voice and a clean thumbnail do not mean the person actually knows the market. Some of these people are promoting a stock because they genuinely believe in it, and they happen to be holding it themselves, which means their opinion is not neutral even if they are being honest. Others are paid to promote it, and never say so clearly. Either way, you are not getting an objective view. You are getting someone else’s position dressed up as advice. Before you act on anything you watch or read online, ask two questions. Does this person hold the stock they are talking about? Are they getting paid to talk about it? If the answer to either is yes, treat what you heard as one opinion with a reason to be biased, not as research.

Trading or investing on behalf of someone else

A friend hears that you invest and asks you to take their money and manage it for them. It sounds harmless, even flattering. It is neither. The moment you are trading with someone else’s money, every decision carries a weight that has nothing to do with the market. You check prices for reasons that are no longer about your own goals. A dip that you could shrug off with your own money becomes a phone call you are dreading. You lose the freedom to trade the way you normally would, because now you are managing someone else’s expectations along with the position. And if it goes badly, it rarely stays just a financial conversation. It can cost you the friendship too, over money that was never really yours to be responsible for. Invest your own money. Let your friends learn to invest theirs.

Being fully aware, in both directions

When the market goes up, you make money. Most people understand that part instinctively, and it feels good, so nobody needs convincing. What fewer people understand is the other half. When the market goes down, you build wealth. Every dip is also a chance to buy the same shares for less than you paid before, lowering your average cost and setting up a better return once the price recovers. The market does not move in a straight line, and it never will. If you only see the down days as damage, you are missing half of what investing actually is. A falling price is not always bad news for someone who is still buying. Know both sides. Make money when it rises. Build wealth when it falls.

I did not have anyone to call when I made these mistakes. No uncle who had already done this, no family conversation over dinner that could have saved me a year or two of learning things the hard way. That is simply the position of being first. But you do not have to be first anymore. Not with this list in front of you.

We cannot control which year we started, or what the market decided to do that year. We cannot control the mistakes we already made before someone told us better. We can control whether the person coming after us has to make every one of them again. Eighteen mistakes took me years to collect. I would rather you read them in twenty minutes.

I talked through these same mistakes on a podcast

I sat down with Sanjaya Elvitigala and went through these same mistakes on his channel, in Sinhala. If you would rather listen than read, this is the same ground covered in conversation.

That is it for today. I hope you learned something. Please consider rating this article below, and share it with any friends who need it.