The 3 biggest investing mistakes you can make

Buying Commonwealth Bank of Australia (ASX:CBA) and Wesfarmers Ltd (ASX:WES) shares may sound boring, but it's better than some alternatives.

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If the process of investing is 'investing money today so that it will be worth more money in the future' then the other half of that equation is 'avoiding situations where your investment won't be worth more in the future.'

Sounds simple, but it trips up a lot of investors. Here are 3 simple things that could ruin your investing record:

Trading too often

Depending on which broker you use and how much you invest, you could end up paying around $15 per trade, which is equivalent to a 1.5% fee on $1,000 every time you buy and sell.

Many fund managers underperform the market due to having a 1.5% per annum in fees; if you're a DIY investor and you trade too much, you're imposing the same headwinds on yourself – making it that much harder to earn a respectable return over time.

Being in a hurry

Often investors think that by looking outside the big names like Wesfarmers Ltd (ASX: WES) and Commonwealth Bank of Australia (ASX: CBA), they can increase their returns. It's true, they can. But unfortunately the search often leads many investors into high-risk shares like Resapp Health Ltd (ASX: RAP).

Higher risk business hopefuls are often hotly discussed on internet forums which can have the effect of making them appear more investment-grade than they are – sometimes with terrible consequences for your investment, as investors in Innate Immunotherapeutics Ltd (ASX: IIL) discovered in June.

Having the wrong focus

There are some mighty smart fund managers and other investing professionals that are quoted in the media hundreds of times each week. It's easy to follow their advice. However, the vast majority of it isn't necessarily suitable to each investor's individual circumstances.

For example, fund manager Allan Gray Australia was quoted last week about the opportunity of companies they hold like Mineral Deposits Limited (ASX: MDL) and Capral Limited (ASX: CAA). Allan Gray is a good fund manager, but most investors simply aren't prepared to own resource companies at the bottom of the commodity cycle when they are ugly and unpopular.

They might be good investment ideas, but following them if they are not suitable for you could lead to selling at the wrong time, trading too much, and/or being in a rush to earn back what you lost in your investment mistakes.

Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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