Almost everyone makes investment mistakes. Yet, these mistakes may benefit us in the future, as we utilize our knowledge to make better and more informed business and investing decisions even if they cost us money the first time around. Like the advices from our parents, we must often experience it ourselves before we truly learn from them. However, if we know about our tendencies before we make them, it is much easier to recognize the problem and learn from it. Here are 10 common mistakes that people make when it comes to investing.

1. Blinded by Reward

Being blinded by the possible rewards of an investment can lead us astray when it comes to the associated risk of that same investment. Hearing others speak of amazing dividends, huge returns, and immense profit taking can leave us chomping at the bit to jump into an investment without considering the risks involved. You must often step back for a moment and consider just why the payoffs are so high for a particular investment, and then decide whether the risks of such payoffs are worth what might only be a fleeting reward.

Some people find that they are unable to stop thinking about their investments because they are worried about losing money. Even though their investment decisions may be good ones, they are unable to stop fixating on the investments and lose sleep over the fact that their money is at risk. Sometimes investments just aren’t worth the fear that comes with them and for some people certain risk-involved investments may be considered a mistake due to the loss of peace of mind they are suffering.

8. Heightened Expectations

Heightened expectations of investment returns can result in poor decisions. Often influenced by Wall Street analysts or our financial advisors, many are no longer satisfied with four or five percent returns on their investments. Heightened expectations due to constantly being led to believe returns of eight, nine, or ten percent are a regular occurrence can lead to skewed decision-making regarding where and how money is invested.

9. Low Capital Investments

Sometimes it’s not that we don’t make the correct decisions, but when we do, we don’t put enough money into the pot to make the decision worthwhile. Purchasing 10 shares worth of stock when the stock price is $10 a share, even if the investment takes off, might not make a significant difference in your overall portfolio.

10. Investing Before Debt is Reduced or Eliminated

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