William Huston, AIF®, AIFA®

Investing Mistakes: The Best I’ve Ever Made

William Huston, AIF®, AIFA®

William Huston, AIF®, AIFA®

Investing Mistakes: The Best I've Ever Made

man weighing investment options

I started investing when I was 13. I learned about compound interest at school, and I figured that I would become a millionaire if I could just invest my entire life savings asap. Initially, I looked into the stock market but heard only reports of doom and gloom thanks to the dotcom bubble.

In retrospect, the crash would have been a great time to invest (with help, of course), but I had the attention span of a flea (or a 13-year-old girl who needed to get back to her computer), so I asked my dad.

My dad and my grandfather, both experienced real estate investors were buying land that was available for commercial development, and they welcomed me in with a 3 percent share (equivalent to my life savings of $3,000).

Less than three months after we bought the land, the city closed off the road access to my beloved investment, which rendered it worthless. No, wait it’s less than worthless because I still have to pay property taxes on it every year.

Is investing worth it or is it just a trend that's going around? Let's have a look at some reasons why you should take time and invest your money.

Key Points
  • Investing is a great way of earning compound interest from your investments
  • Among the reasons why you should invest include: To build wealth, beat inflation and generate passive income so that as to achieve your long term goals
  • Some of the common mistakes made by investors include failing to do research, following the crowd, lack of diversification, emotion-driven decisions, timing the market, overconfidence and not having a plan
  • Before you start investing, ensure you have an emergency fund ready, live below your means and invest the difference, don't try to time the market, systematically invest in index funds and take advantage of your retirement account

The contents of this article are for educational purposes only. They are not intended to be a source of professional financial advice. You will find experts on financial planning, financial management, and real estate here. More on disclaimers here.

What is Investing?

investment funds and returns

Investing refers to the act of allocating money or resources with the expectation of generating a profit or return. In other words, investing involves putting your money into assets or ventures that you believe will appreciate in value over time, or generate income in the form of dividends, interest or rental income.

There are many different types of assets that people can invest in, including stocks, bonds, real estate, commodities and more. Each type of asset has its own unique characteristics, risks, and potential rewards.

The goal of investing is to grow your wealth over time, and there are many different strategies and approaches to investing that people can take. Some investors focus on long-term investments and buy and hold assets for many years, while others may take a more active approach and trade assets more frequently.

Why Should You Invest?

Investing is important and beneficial for a number of reasons:

Building wealth

growing investments

Investing allows you to earn returns on your money and potentially build wealth over time. Whether you're investing in stocks, real estate or other assets, investing can help you grow your money and achieve your financial goals.

Beating inflation

Inflation erodes the purchasing power of your money over time. By investing your money in assets that have the potential to earn returns that outpace inflation, you can help protect your purchasing power and maintain the value of your money over time.

Generating passive income

income from investment

Many investments, such as rental properties or dividend-paying stocks, can generate passive income streams that can help supplement your regular income and provide financial stability.


Investing in a diverse range of assets can help spread out risk and reduce the potential impact of any one investment performing poorly.

Achieving long-term financial goals

Investing can help you achieve long-term financial goals such as saving for retirement, buying a home or starting a business.

What are the Common Mistakes Made by Investors?

Investing can be a great way to build wealth and achieve financial goals, but it's important to be aware of the common mistakes that investors can make. Here are 5 common mistakes made by investors.

Failing to do research

investor researching online

One of the worst mistakes that an average investor who is just getting into the game can make, is investing in assets without doing enough research. This can lead to poor investment decisions, losses and missed opportunities. So before you jump on any investment train, be sure to do your own research in order to achieve early success.

Following the crowd

Some investors follow the crowd and invest in trendy assets without fully understanding their potential risks and rewards. Instead of buying penny stocks because they are cheap and everyone is buying them, do your own research and buy stocks of companies that have a positive growth trajectory. This will help you avoid future losses.

Lack of diversification

Failing to diversify your investments can lead to over-exposure to any one asset class or sector, increasing the risk of losses. To avoid such costly mistakes, speak to an experienced portfolio manager to help you properly allocate your assets.

Emotion-driven decisions

Many investors make decisions based on emotions rather than sound research and analysis. This can lead to poor investment decisions and missed opportunities.

Timing the market

Trying to time the market by buying and selling assets based on short-term trends can be risky and can lead to losses.


Some investors may be overconfident in their abilities and make investment decisions that are too risky or not well researched.

Not having a plan

Investing without a clear plan can lead to poor decision-making and missed opportunities.

Before you start investing, do this first

First things first!

Have an emergency fund ready before ever making your first investment

The last thing you want as a newbie investor is to sell out of a newly purchased investment because you were hit with a curveball expense. Have at least three to six months’ worth of living expenses set aside before even thinking about investing in the stock market.

Live below your means and invest the difference

For a young investor, decades away from retirement, saving or investing at least 15 percent of your gross salary can help you fund an adequate portfolio. No amount of fancy investing can make up for a poorly funded portfolio. Contrarily, an adequately funded portfolio can make up for a plethora of investing mistakes.

Don’t try to “time the market” and avoid exotic investments

Though mass media and television may give off this perception that investing requires impeccable timing and finding the next hidden gem of a company, both of these are flat-out wrong!

Systematically invest in (boring) index funds

All investors, experienced or inexperienced, should keep it simple. This can be considered “boring” because there is no guessing about when or where to invest. A portfolio compiled of low-index funds is a firm foundation for a newbie investor.

Take advantage of retirement accounts

There is a lot of hesitation from young investors to access their retirement accounts out of fear that they won’t have the funds later down the line. The reasons to utilize it, however, are compelling; lowering your taxes, boosting your return on investments, getting a head start on your estate planning (via beneficiary selection) and in most states, protected retirement assets from creditors. That would be the condo that I bought at the height of the housing market bubble. Between home improvements, homeowner association dues, mortgage interest and the decrease in value, I lost nearly $40,000 on that unit before I was finally able to get rid of it.

And then there was my foray into individual stock picking and volume trading, which mercifully lasted only a year before I lost a few thousand dollars, and learned about portfolio management, asset allocation and risk tolerance.

Make Investing Fun!

You see, when it comes to investing, I’ve made tons of mistakes. I’ve lost plenty of money. However, my mistakes are a small price to pay for an early financial education. Thanks to my bad investments, I know something that most investors never learn. Investing is hard.

It’s hard to stick with an investing plan when you aren’t committed to your goal. It’s hard to shy away from attempts to beat the market. It’s hard to predict the next market correction and to be reasonably certain that you’re getting a good deal. It’s especially hard to admit when you’ve made a poor investment and need to cut your losses.

Even more, it’s hard to be greedy when others are fearful, and fearful when others are greedy. It’s hard to develop an investing strategy that doesn’t waver while the markets and your own emotions waver. It’s hard to admit that you’ll make more mistakes. However, none of this should stop you from investing. It doesn’t stop me.

If anything, these hard facts helped me get back in the saddle after each investing failure. They led me to learn about the intersection of financial markets and emotion. It’s how I stumbled across concepts like modern portfolio theory, disciplined investing and index investing, which have shaped the investor I’ve become.

I’ve committed to take what the market offers and to act as a buy-and-hold investor. I’ve learned that constantly switching strategies is worse than sticking with a strategy that was a loser this year.

Even in my state of relative maturity, I find investing hard. I don’t find it difficult to create rules that should maximize long-term, risk-adjusted returns, but I do have trouble following my own rules because it’s nearly impossible to predict how I will react emotionally to changes in my circumstances.

For me, investing is hard, but it’s also worthwhile. It’s worthwhile for me to know that I’m doing what I can to set myself and my family up for long-term financial success. It’s worthwhile to know that, given a long enough timeline, even mediocre investors can become wealthy.

Learning to invest doesn’t yield an immediate sense of financial peace like paying off debt or learning to budget. Rather, learning to invest helped me to connect my actions today to my opportunities tomorrow.

Bay Street Capital Holdings

Bay Street Capital Holdings

Bay Street Capital Holdings is a Black-owned, independent investment advisory, wealth management, and financial planning firm headquartered in Palo Alto, CA. Thee firm manages portfolios with the goal of maintaining and increasing total assets and income with a high priority on managing total risk and volatility.

The firm was founded by William Huston founded Bay Street after 13 years of supporting the United States' largest retirement plan ($650B) Thrift Savings Plan. In 2022, he was recognized as Investopedia’s Top 100 Financial Advisors for 2022. In California, Bay Street Capital Holdings is the only Black-owned firm out of the twenty firms that received this recognition.

In Scottsdale Arizona, Ekenna Anya-Gafu CFP, AAMS is recognized among the Best Financial Advisors for his responsiveness, friendliness, helpfulness, and detail. In 2021, Bay Street was selected as a finalist out of over 900 firms across the US in the category of Asset Manager for Corporate Social Responsibility (CSR).








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