Common mistakes when investing for the first time
The most frequent stumbles of people who start investing from an app, and how to avoid them with simple habits.
Oct 22, 2026 · 4 min read
Investing has never been easier: in a few minutes you can open an account on your phone and buy shares of Apple, Nestlé or an ETF covering the whole world. But that ease also makes it easy to get things wrong. These are the most common mistakes beginners make, and some ideas for avoiding them.
1. Investing money you'll need soon
Stocks can fall 20%, 30% or more in a few months. If you have to sell right in the middle of a drop to pay for something urgent, you turn a temporary loss into a real one.
How to avoid it: before investing, build an emergency fund in something stable and easy to access. Only invest in stocks money you won't need for several years.
2. Putting everything into a single stock or a single country
It's tempting to bet it all on the company you know or the one "everyone's talking about". But a single company can have a bad year, a scandal or an industry shake-up. The same goes for a single country.
How to avoid it: combine several assets from different sectors, countries and currencies. Read how to build an internationally diversified portfolio and check the exposure section in the optimizer: it warns you if you're too concentrated.
3. Confusing lots of assets with diversification
Holding ten US tech stocks isn't being diversified: they all react to the same news. Diversification depends on how much your assets move together, not on how many you have.
How to avoid it: look at the optimizer's correlation matrix. If almost everything is in dark shades of blue (high correlation), your assets move almost identically.
4. Chasing whatever rose the most
Seeing a stock that rose 200% in a year makes you want to buy it. But past performance doesn't guarantee the future, and whatever rose the most often already has very high expectations baked into its price.
How to avoid it: remember that the optimizer, like any model, uses the past. Set maximum weights per asset and compare methods such as HRP or equal weights, which depend less on past returns.
5. Panic selling
Drops are a normal part of investing. People who sell when everything is falling and buy back once everything has already recovered usually end up with results far worse than the market's.
How to avoid it: before investing, look at your portfolio's historical maximum drawdown in the optimizer. Ask yourself honestly whether you could watch your investment show that loss without selling. If the answer is no, choose a more stable mix.
6. Ignoring the exchange rate
Many people measure their international investments in dollars and forget that they spend in euros, pounds or pesos. An asset can rise in dollars and fall in your currency, or the other way around.
How to avoid it: choose your base currency in the optimizer. Read currency risk to understand how it plays a role.
7. Not looking at costs
Trading fees, custody fees, fund expense ratios, gaps between buy and sell prices, taxes… They seem small, but they add up year after year.
How to avoid it: compare costs across platforms and between similar ETFs. Trading less often also helps.
8. Trading too much
Constantly buying and selling, trying to guess short-term moves, usually generates more costs and more mistakes than gains.
How to avoid it: set a plan and review it on a fixed schedule, for example once or twice a year. Rebalancing from time to time — going back to your target weights — is more useful than trading every week. In the optimizer's backtest you can compare results with and without rebalancing.
9. Following tips you don't understand
Social media, chat groups, videos about "the stock that's about to explode"… Information is everywhere, but it isn't always good or impartial.
How to avoid it: if you don't understand why you're buying something, you probably shouldn't buy it. Use tools that explain the why; for example, the optimizer's "Why these weights?" section explains the model's decisions in plain language.
10. Believing the model is a prediction
Optimization tools are very useful for thinking in an orderly way, but they use data from the past. A portfolio that's "optimal" according to the model is no guarantee of future results.
How to avoid it: use the results as a guide, try different periods and methods, and see whether the conclusions hold. If they change a lot, that's a sign the uncertainty is high.
A checklist for your first investment
- Do I have an emergency fund?
- Can this money stay invested for several years?
- Does my portfolio combine countries, sectors and currencies?
- Do I know its worst historical drop, and could I stomach it?
- Do I know my platform's costs?
- Do I have a plan to review it, for example every six months?
If you answered yes to everything, you're on the right track. You can start by trying a sample portfolio in the optimizer and tailoring it to you.
In short
Most beginners' mistakes aren't about math but about behavior: concentrating too much, chasing fads, selling out of fear and forgetting about costs and currencies. A simple, diversified plan reviewed calmly usually beats improvisation.
Try it with your own assets
Build a list and see which portfolio the model calculates, in your currency.
Disclaimer: Educational and simulation tool. It is not investment advice or a personalized recommendation. Past performance does not guarantee future results.