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For readers in a rush:

  • They don’t forget to strike a good balance between checking in on investments whilst not being put off by daily market fluctuations.
  • They don’t forget that time in the market is better than worrying about the best time to invest in it.
  • They don’t forget to be diverse so that they can spread their overall risk.

Have you ever noticed that as soon as you mention investing in conversation, everyone tells you that you should do what they do because it works for them?

But everyone’s investment strategy should be different. Because how you approach investing should be unique to you.

There are a few golden rules everyone sticks to when they invest; like knowing their risk appetite, and how investing regularly can produce better long-term results.

But what about the ‘don’ts’?

Here are three things you’ll find successful investors avoiding.

But first, the fine print. This article can give you tips, but it isn’t personal advice. There’s a risk with investing that you could get back less than you put in initially. This is because investments can fall as well as rise. If you’re not sure if investing is right for you, you could speak to an independent adviser through Unbiased Link opens in a new window.

1. They don’t ‘pot watch’

It’s human nature to want to know what’s happening. And let’s face it, being able to check in on your investments is part of the fun of investing.

But successful investors strike a balance.

If you’re watching your investments every day, you might find yourself worrying about the cyclical nature of the stock market. And that could spur on negative behaviour, like panic buying or panic selling.

Daily fluctuations can feel dramatic, but they don’t tell the bigger story. When we look at the historical performance of the stock market, those daily fluctuations don’t seem as intense. But we can’t predict the future performance of the market based on what it did in the past.

That’s where funds really shine. One of the benefits of investing in managed funds is that the fund managers do all the watching for you.

You’re still in control because you’re choosing the right investment fund for you. But the heavy lifting is taken care of.

2. They don’t try and time the market

If you’ve ever wondered ‘when’s the best time to invest?’, you aren’t alone.

But successful investors don’t try and look for market lows or highs to buy and sell. Instead, they develop the mantra that time in the market is more important than worrying about when to invest in it.

Because investing is designed to be a long-term savings tool, the more time you spend in the market, the less you need to worry about the uncertainty of it. You’d also increase the potential you have for making a profit. But that isn’t a guarantee, because markets can go down as well as up and you could get back less than you put in.

3. They don’t forget to diversify

Diversification is a golden rule when it comes to investing, which is why it comes up time and time again. Successful investors know that being diversified is one of the keys to long-term success.

When we talk about diversification, we’re also talking about risk. They work together a bit like a radio DJ’s mixing desk. You can turn one up and turn one down simultaneously. If you increase your diversification, you reduce your risk, and vice versa.

In simple terms, being diversified means having a wide spread of investments.

It’s particularly important for investors who are buying shares in individual companies, but the principle still applies to investing in funds, too.

With funds, you shouldn’t have to worry as much, because the fund manager will be making sure the fund is as diversified as possible, whilst still being in line with its performance and risk objectives.

But choosing the funds you invest in is still up to you.

Make sure you’re investing in a variety of geographies, sectors, and fund types.

Where to next?

  1. Feel ready to start investing? Get started with investinghere.
  2. Already investing with us and want to put your newfound knowledge into action? Go to your account.
  3. Need to keep brushing up on your knowledge? Read our article all about investment risk.

We hope the information in this article is useful, but it isn't financial, personal or tax advice. If you want expert advice, you should speak to an Independent Financial Advisor. Remember, the value of investments can go up and down, so you may get back less money than you put in.

You should think of investing as a medium to long-term commitment – so be prepared to invest your money for at least five years. Tax depends on your individual circumstances and the regulations may change in the future.

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