Before investing, it is imperative that you have money, don’t take out a loan because you think you have found the next hot stock. There is no guarantee that you will make money investing, unless you put all your money into government securities or a savings account that guarantees a return. Once you have an amount that you can invest, it is up to you to focus on your investment objectives. What is your purpose for investing? A downpayment on a car or house, college tuition, or retirement? Below are some common investing mistakes beginners and un-educated investors make.

Lack of diversification

There is an old saying: Don’t put all of your eggs in one basket. Diversify, diversify, diversify! When starting out, investors try to put their money in only a few uncertain stocks, rather than spreading them out amoung several stocks, bonds, and mutual funds. By not following this, you are taking a greater risk than if you diversify. Spread your investment money around.

Look for instant results

Investments take time to grow, particularly if you are invested in the stock market. Too many investors make the mistake of getting easily frustrated and selling quickly. While there are successful day traders, it is not recommended for most people and not the way to build an investment portfolio.