1. Falling in love with a company's product
The fact that a company has a great brand does not mean that the company is profitable. Emotional attachment to a product can lead to investment disaster. You have to ascertain the debt level, competitive advantage, and profit margins before investing
2. Disregarding valuation
Value is different from price. Value is what you get; price is what you pay. There are low-priced investments that are trading above their fair value estimates. Determine the fair value of the stock and buy when the price is less than the fair value.
3. Avoiding diversification
Don't put all your eggs in one basket. Design a portfolio that comprises different categories of stocks as they do not all respond to the market in the same way. Some stocks are more volatile than the market. Some stocks appreciate when the market depreciates; some depreciate when the market depreciates. Combining stocks with different correlation to the whole market will reduce your risk.
4. Failure to review investment portfolio
It is impossible to eliminate underperforming stock if you don't review your portfolio regularly. In addition, you won't be able to benefit when the market condition becomes favourable if you are passive.
5. Timing the market
It is impossible to predict future market movements accurately. The best strategy is to invest regularly and for the long haul