Don’t Make the Same Mistakes Over and Over Again

image of word mistake

By Lori Schock, Director of the SEC’s Office of Investor Education and Advocacy


In the spirit of Groundhog Day and the movie by the same name, I thought I’d highlight what mistakes NOT to make over and over again when making investment decisions.

Mistake #1:  DON’T create an investment plan without identifying your financial goals.

DO invest for your goals. Whether it’s planning for retirement, saving money to buy a home, paying for college or putting money away for a rainy day, every investment plan should take into account your financial goals. The free financial tools and calculators on can help keep you on track to achieve your goals.

Mistake #2:  DON’T choose an investment professional without conducting a background check.

DO go to to check out an investment professional. Just type the name of the individual or firm in the “Check Out Your Investment Professional” search tool to learn about their background, registration status and more. You can see their past employment history and whether they have any complaints. It’s a great first step toward protecting your money. You can never ask too many questions. Some basic questions include:

  • Are you registered with the SEC, a state securities regulator or the Financial Industry Regulatory Authority (FINRA)?
  • What training and experience do you have?
  • How do you get paid? What fees are involved?
  • How will you be monitoring my account?
  • How much of my money will go to work for me?

Mistake #3:  DON’T pick investment opportunities without doing research first.

DO conduct your own independent research. Just because someone recommends an investment opportunity doesn’t mean you should take it at face value. Do your own thorough research every time. If you don’t understand what you’re investing in, ask questions. If you still don’t understand, then it might not be the right investment opportunity for you.

I know everyone is always looking for the latest hot investment opportunity that can make you  tons of money. Remember your long-term goals and most importantly, your risk tolerance. Often, the latest trend in investing doesn’t have the same performance history and transparency as other options that have been around for some time. Always keep in mind that an informed investor is an empowered investor.

Mistake #4:  DON’T make decisions without understanding how fees can affect your investment portfolio.

DO understand that fees matter. Certain fees may seem small at first, but they can add up over time and cut into your investment portfolio. Make sure you ask about fees upfront. Ask questions about how the fees will affect how much money you’ll make. You can check out our Investor Bulletin: How Fees and Expenses Affect Your Investment Portfolio.

Mistake #5:  DON’T ignore how to protect your investments.

DO learn how to spot the red flags of fraud. Scam artists will try various ways to get you to invest in their bogus investment opportunities. They may offer you a so called “once in a lifetime” exclusive investment opportunity. They may promise you high returns on your investment with no risk. They may even tell you that the opportunity won’t last long in order to pressure you into investing right away. Don’t fall for these aggressive sales tactics. If an investment opportunity sounds too good to be true, it probably is. Learn more by checking out our short videos on what you can do to avoid investment fraud.

Biggest Mistake of All: DON’T make investment decisions before going to

DO go to before you invest. On, you’ll find all kinds of information to help you get started on creating a saving and investing plan that works best for you. Doing your research and taking control of your financial future will help keep you from making the same investment mistakes over and over again!



The Securities and Exchange Commission disclaims responsibility for any private publication or statement of any SEC employee or Commissioner. This article expresses the author’s views and does not necessarily reflect those of the Commission, the Commissioners, or other members of the staff.