10 Common Investing Mistakes Beginners Make

Ten Self-Deceiving Investing Mistakes

As a beginner investor, have you heard or said any of these seemingly harmless lines? Investors often use these beliefs to comfort themselves, but the beliefs may be the very reason they lose money. Here are ten common self-deceptions to recognise so that you can invest more rationally and steadily.

1. "The share price has fallen so much that it cannot fall any further"

Many beginners assume that once a share reaches a certain level, it cannot fall further. In reality, stock markets are volatile, and a further decline remains possible. The market will not stop merely because you believe a share is "cheap enough".

Example: Maravai LifeSciences reached a peak in 2021, then fell 60% before rebounding 61%.

Many people would have assumed it could not fall further, yet it later declined by 95%. A falling price does not mean the bottom has been reached. Investors should assess the company's fundamentals rather than judge from price alone.

2. "The share price has risen too much, so it cannot rise again"

After a stock has risen for a long time, beginners often assume that the rise is over. But no one can predict how high a price can go, and markets can exceed expectations.

Example: When gold moved above US$2,000 an ounce in 2020, many people said it had risen too far and that buying would mean taking over at the top.

There was volatility in between, but by late 2024 and early 2025, continued central-bank buying, inflation pressure and geopolitical tension pushed gold to another record above US$3,300 an ounce.

A large rise does not mean the rise is finished. The move itself cannot determine future potential. Supply and demand, market sentiment and fundamentals still matter. As a global safe-haven asset, gold is influenced over time by central-bank policy, the US dollar and other factors. Its investment value cannot be dismissed simply because it has already risen.

3. "This stock will recover eventually"

Many stocks never return to their former level after reaching a peak. Investors cannot rely on historical performance alone to predict what comes next.

Example: AirAsia, now Capital A, traded near RM4 in 2011. After falling, it reached a new high near RM4.40 in 2018. COVID-19 then severely affected the company: flights stopped, debt rose and the share price fell.

Many people said it would surely return. Years later, its capital structure, profitability and business direction had changed significantly. Although the business gradually recovered, the share price remained low and had still not returned to its old peak.

"It used to be strong, so it will eventually return" is emotional attachment, not rational analysis. If fundamentals change because profitability falls, an industry transition fails or debt becomes heavy, the stock may genuinely never return.

4. "The share price is low, so I cannot lose much"

Many beginners think a low-priced stock is low-risk. In fact, a low price may come with weaker fundamentals and greater risk. If the stock falls to zero, you lose the full investment.

Example: A once-popular engineering stock had traded above RM1 during its strong years in the 2010s. When it fell below RM0.10, many people rushed in because it looked cheap.

The company had serious debt problems and repeated losses, and it applied for debt restructuring in 2023. The price fell further, locking in many investors and causing losses of almost 100%.

Loss is measured by how much money you put in, not by the price per share. If you invest RM10,000 at RM0.10 and the price falls to RM0.01, you still lose 90%. A low share price is not the same as a bargain. There is usually a reason for it, such as problems with the company's finances, business or management.

5. "It is only an industry cycle; a rebound will come"

"The worst is over, and things will improve" is something investors often say without enough basis. Some industries can remain weak, and the rebound you are waiting for may never arrive.

Example: Parkson Holdings (5657) was once one of Malaysia's largest department-store chains, and its share price was close to RM6 in 2008. As e-commerce grew and retail habits changed, physical department stores remained under pressure. Investors kept asking whether the industry would eventually return after being weak for so long.

By 2025, the share price was still moving around RM0.15, market value had shrunk sharply and the industry continued to contract. The department-store problem was not temporary; it reflected a change in consumer behaviour. The weakness was structural, not cyclical.

You need to decide whether you are facing a temporary storm or an irreversible decline. Do not try to defeat a trend with emotion. Some damaged industries genuinely never rebound.

6. "I will sell when the share price returns to what I paid"

Beginners often cling to hope during a loss and decide to sell only when the price returns to their purchase price. But a stock does not follow your plan merely because you bought it.

Example: Many retail investors bought Intel above US$60 in 2021, believing it was a safe blue-chip technology stock.

The company then repeatedly lost its technology lead, its process technology fell behind TSMC and AMD, and profits dropped sharply in 2022 and 2023. The share price fell to around US$25. Many investors told themselves, "I will sell when it returns to 60 because I do not want to take a loss."

Although there were rebounds in 2024 and 2025, the price still did not return to the US$50–60 range, while investors missed other opportunities with more potential. A stock will not recover because you are losing money; it does not know you. If you no longer believe in the company, even a return to your purchase price would not automatically make it worth holding. Letting "I want to break even" control your decision only creates greater opportunity costs and emotional pressure.

7. "This stock is stable, so it is a conservative investment"

Beginners often assume an established company must be stable. But no company remains stable forever, and even a century-old business can collapse. Investors need to assess the company's future, not only its history.

Example: Credit Suisse was seen as a century-old European bank, and many conservative investors even held its bonds.

Management scandals, failed risk controls and liquidity problems accumulated. In 2023, UBS completed an emergency takeover. Shareholders were effectively wiped out, while bond investors suffered severe losses.

Many retail investors had said that a large bank could not fail. Financial markets do not trust a brand merely because it is old; they look at the underlying strength. A "conservative stock" is not permanently conservative. Industry changes, policy shifts or management mistakes can make it high-risk. Investors must reassess the real condition of an "old blue chip" instead of assuming it is safe because of its brand or history.

8. "If only I had bought Tesla"

Missing a popular stock does not mean you lost money. A stock you did not buy cannot create a loss. The real loss happens when you buy the wrong stock and later sell it at a lower price.

Example: People often say, "If only I had bought Apple or Nvidia in 2012," or, "I almost bought Tesla, and now it has flown." Peter Lynch put it well: if you did not buy it, you did not lose. You were not "missing out"; you were preserving your capital.

This thinking can make people chase rising prices because of Fear of Missing Out (FOMO). In 2021, retail investors poured into GameStop, AMC, Dogecoin and ARK funds because they feared missing the opportunity. Many who chased prices near the top remained trapped afterward.

The way to lose money is to buy, watch the price fall and then sell. Do not punish yourself over a stock you never bought. Even if you had bought it, you might not have held on. And do not buy impulsively because of FOMO.

9. "See? I told you it would rise"

A short-term price move does not prove that your original decision was correct. Markets are highly volatile, and a rise or fall alone does not show whether your judgment was sound.

Example: Glove stocks surged during the pandemic in 2020. Many investors believed they were clever because they made money immediately.

After the pandemic eased and global supply and demand adjusted, glove stocks fell to one-tenth of their peak. Many people made money briefly and then suffered lasting losses. A short-term move is not proof that your analysis was correct. You are only truly right when your understanding of the business stands the test of time.

10. "This unknown stock is my next big opportunity — it could rise ten times"

Beginners sometimes fantasise that a company with no profit and no stable business will become the next great stock. In reality, such companies often lack the fundamentals to support the story, making them extremely risky.

Example: Nikola was promoted as the "hydrogen-powered Tesla". Its founder said the company had already built a hydrogen truck. The share price once reached US$90, giving the company a market value of more than US$30 billion.

It was later revealed that a demonstration video showed a truck rolling downhill without actual propulsion technology. The share price has since fallen below US$1, causing investors heavy losses.

A story about making ten times your money sounds exciting. In reality, if a company has no revenue, no profit and only a vision, it may be closer to a "no-shot stock" than a long-term stock. As Peter Lynch said: "It is not a long shot; it is a no shot."

Conclusion: the investor's greatest enemy is not the market, but self-deception

Successful investing does not come from feelings or wishful thinking. It is built on rational analysis and risk management. Instead of clinging to "it should rise" or "I hope it comes back", look carefully at the company's fundamentals and industry trend.

Avoiding common psychological traps is the first step towards becoming a mature investor. Do not let hope prevent you from cutting a loss, and do not let fear make you chase a rising price. Move beyond these self-deceptions and look at your investment decisions more clearly.