1. Waiting for the right moment
Nobody knows when the market will fall. In a Vanguard study of the MSCI World index from 1976 to 2022, investing a sum at once beat spreading it over three months 68% of the time.[1] Money that waits earns less on average. Read more in Lump sum or monthly?
2. Paying high fees
The fee is taken from your whole balance every year. Morningstar's research finds that it is the most reliable predictor of a fund's future returns.[2] See What is a good fund fee?
3. Selling in a fall and buying after a rise
Morningstar estimates that the average dollar in US funds earned 8.7% a year over the ten years to the end of 2025, while the funds themselves returned 9.9%. The gap of about 1.2 percentage points a year comes from the timing of purchases and sales.[3]
4. Owning too little of the market
A few shares, one sector or one country can do far worse than the market as a whole. A broad index fund spreads the money over many companies and countries in a single purchase. See What is an index?
5. Investing money you will need soon
Shares can fall sharply and stay down for years. Keep an emergency buffer in a savings account first. The UK's MoneyHelper suggests three to six months of essential outgoings as a rule of thumb.[4]
Common questions
Which mistake costs the most?
It depends on the person, but not starting and selling in a fall are the hardest to repair, because lost time cannot be bought back. Fees are the easiest to fix.
Is it too late to start?
The best outcome comes from starting early, but the second best comes from starting now. A shorter horizon mainly means that less of the money should be in shares.
Sources & further reading
We cite independent authorities so you can verify everything yourself. Last reviewed 15 Sept 2026.