We've all been there, so you should know there's a light at the end of the tunnel. Before you give up on investing, let's go over some common investment mistakes that investors make and how some investors have navigated through them and are still investing and building wealth today.

Wrong financial advice—working with the wrong financial planner, or listening to social media or friends without doing your own research on the investment.

Not being clear on your investment goals—understanding your life goals is key at Sophia and it's important to think both short and long term when investing.

Emotions are driving investment decisions—only buying stock of companies that you know or love rather than more objectively analysing the market. Research is key when deciding to invest.

Timing the market—being too focused on “buying low and selling high” rather than aligning with your short and long-term investment goals. 

Trading too often—constantly watching the market and turning over investments can impact long-term growth in your portfolio. 

In case you missed it: Five steps to building an investment portfolio

The Sophia team and financial experts share below how they overcome investment mistakes and continue to work towards building wealth:

Take the time to reflect

“To remind myself that even the most prolific investors will make investment mistakes. Make sure time is spent to reflect on why the misjudgment happened and turn them into insights that can be applied the next time you come across similar opportunities.” —Katy Yung, Sustainable Finance Initiative

Diversification is your friend
“For me it's a continued focus on diversification. Diversification simply means, not putting all your eggs in one basket, or that you aren’t just investing in the same thing. As you build wealth you need to think about how you can ensure that you are reducing the risks of your investing activities because each investment may react differently to certain world or market events.

“To ensure diversification, there are different asset classes (stocks, bonds, cash, real estate) and it’s learning about them and seeing how you can invest across them in different ways.”—Nicole Denholder, Sophia 

Have the right mindset 
“No one gets it right all the time, including professional money managers. Investing (and wealth-building) is a long game which rewards self-awareness, consistency and a sensible and disciplined investing approach. If you’ve made a mistake, forgive yourself, own the lesson, make the changes and get back on the proverbial bike. To quote Nelson Mandela: I never lose. I either win or I learn.” —Christine Yu, Sophia 

Teach kids about investing
“To help kids learn about investing and recovering from investment mistakes, get them to think about their investments like trees. If there is a storm which breaks a tree, don’t cut it down but let it grow back bigger and stronger. As they grow up, they will see that trees (like investments) grow back bigger and stronger after the storm.”—Will Rainey, Blue Tree Savings

Take a holistic view 
“Overcoming my own investment mistakes has taught me that mindfulness, education, and adaptability are essential. First, I've realised the importance of staying informed and this knowledge helps me make informed decisions and avoid impulsive choices. Second, I've found that setting clear investment goals and creating a diversified portfolio can greatly reduce the impact of my mistakes. Third, managing my emotions and not letting fear or greed dictate decisions has been crucial but quite a tricky skill to hone. I've learned that patience is key—giving investments time to grow often yields better outcomes. Lastly, I value the lessons from my mistakes, even if they are painful at the time because that pain is real and it helps me to adapt my strategies to be more successful over time.” —Tanya Rolfe, Sophia