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<\/a><\/p>\nInvesting for the first time can feel overwhelming, especially with potential changes to ISA allowances and market volatility. To help new investors navigate the pitfalls, financial experts reveal the most common mistakes\u2014and how to avoid them.<\/p>\n
1. Overlooking Fees That Eat Into Returns
\nWhether you choose a managed fund or a DIY investment account, fees can significantly impact long-term gains.<\/p>\n
Management fees (typically 0.5%\u20131.5% annually)<\/p>\n
Trading commissions (per buy\/sell transaction)<\/p>\n
Platform charges (for holding investments)<\/p>\n
Laith Khalaf, AJ Bell:<\/p>\n
“Small fees may seem insignificant, but over decades, they can cost thousands. Cheap isn\u2019t always best, but cost-efficiency matters.”<\/p>\n
\ud83d\udd17 For fee comparisons: Morningstar Fund Fee Study<\/p>\n
2. Failing to Diversify Your Portfolio
\nPutting all your money into a few familiar stocks (like UK companies) increases risk.<\/p>\n
How to diversify:<\/p>\n
Limit single stocks to \u22645% of your portfolio (Khalaf)<\/p>\n
Invest in index funds (e.g., S&P 500 tracker)<\/p>\n
Consider global funds (but check regional exposure)<\/p>\n
Alan Barral, Quilter Cheviot:<\/p>\n
“A UK-only portfolio misses global growth opportunities and is vulnerable to local downturns.”<\/p>\n
\u26a0\ufe0f Warning: Some “global” funds are 70%+ U.S.-weighted (e.g., MSCI World Index).<\/p>\n
3. Investing a Lump Sum All at Once
\nSusannah Streeter, Hargreaves Lansdown:<\/p>\n
“Drip-feeding investments (pound-cost averaging) reduces risk from sudden market drops.”<\/p>\n
Why it works:<\/p>\n
Buys more shares when prices are low<\/p>\n
Lowers average entry cost<\/p>\n
Avoids bad timing on volatile days<\/p>\n
4. Trying to Time the Market
\nWith political shifts (tariffs, elections) and economic uncertainty, even professionals struggle to predict highs and lows.<\/p>\n
Khalaf:<\/p>\n
“Market timing is like catching a falling knife\u2014you might succeed, but you\u2019ll probably get hurt.”<\/p>\n
Barral\u2019s rule:<\/p>\n
Keep a cash buffer for downturns<\/p>\n
Avoid frequent portfolio tinkering (increases costs)<\/p>\n
\ud83d\udd17 For long-term strategies: Vanguard\u2019s Investor Research<\/p>\n
5. Chasing Past Performance
\nJust because a stock (or sector like AI or EVs) did well recently doesn\u2019t guarantee future success.<\/p>\n
Jason Hollands, Bestinvest:<\/p>\n
“Investing based only on past performance is like driving while staring at the rear-view mirror.”<\/p>\n
Streeter\u2019s advice:<\/p>\n
Research how a company makes money<\/p>\n
Assess future risks\/opportunities (not just past wins)<\/p>\n","protected":false},"excerpt":{"rendered":"
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