Investing can be scary and confusing for beginners. Sometimes those fears are so strong that they stop us from even starting to invest. Mistakes are part of a learning process but you don’t have to make them all yourself. Here are the most common mistakes beginners are struggling with and how to avoid them.

Forgetting to diversify

It is important to diversify your investments to reduce risk. Diversifying means you spread out your potential loss and gains over multiple options. You want your portfolio to benefit from different assets, sectors, and geographical areas. Different assets react variously to the same economic event, that’s why diversification works.

Not reinvesting dividends

In the beginning, your dividends probably won’t even be enough to withdraw. But every little helps your investing account to grow. Investing is for the long run it’s not meant to make money the short way.

Trying to time the market

Timing the market is almost impossible. If it would be easy, everybody would be doing it. The longer your money is invested in the market, the better returns you will get. Don’t gamble by trying to predict a market crash.

Selling when the market crashes

One of the biggest problems for beginners is to control their emotions in times of a crashing market. Ideally, you invested money that you won’t need within the next few years. So there’s no need to freak out. You can lean back and sit it out. The economy will most likely recover and the value of your stocks will increase again. It can also be a good opportunity to buy more. Before you do that dig a little deeper and find out the reasons for the crash. It is not always a good idea to buy more fallen stock.

Buying into investments you don’t understand

The advice of more experienced peers can be beneficial but it is essential to understand the criteria of the investment you want to buy in instead of following blindly. A good investment of somebody else doesn’t have to be the perfect match for your portfolio. Everybody’s portfolio is unique and therefore you have to fulfill your own needs.