Even seasoned investors make mistakes, but beginners in Canada are especially prone to a few common errors. Here are the top five—and how to avoid them:
1. Delaying the Start
Waiting for the “perfect” time to invest often means missing out on market growth. The best time to start is now, even with small contributions.
2. Ignoring Registered Accounts
Not using your TFSA or RRSP first can lead to unnecessary taxes. These accounts offer powerful tax advantages—always prioritise them.
3. Chasing Performance
Buying hot stocks or funds based on past gains rarely works long-term. Stick to a diversified strategy instead of following hype.
4. Lack of Diversification
Putting all your money in one stock, sector, or region increases risk. Use ETFs or diversified mutual funds to spread your exposure.
5. Emotional Decision-Making
Reacting emotionally to market dips—like panic-selling—can lock in losses. Stay calm, think long-term, and avoid knee-jerk moves.
Awareness and discipline can help new investors avoid costly errors and build long-term wealth.