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10 Investing Mistakes That Will Haunt You

This Halloween season, learn how to exorcize ten investing mistakes and set a course for a financial future without fear.

The Evermore Team

The Evermore Team

We all deserve to feel confident about our finances. Evermore is here to make sensible investing accessible to everybody.

It’s Halloween! But it’s not ghosts or goblins you need to fear. Whether you’ve just started investing, or are already near retirement, investing mistakes will always find a way to haunt you. This Halloween season, learn how to exorcize ten investing mistakes and set a course for a financial future without fear.


Mistake #1: Not prioritizing financial literacy

According to a 2022 OSC Investor Knowledge Study, Canadians scored 54% on average on a fundamental financial literacy test. Investing without any financial literacy can become one of the most spine-chilling mistakes beginner investors can make. This doesn't necessarily mean you need to get your MBA to be a successful investor (far from it!), but understanding the basics, such as compound interest, types of investments, and the effect of fees on your returns, is an important step.


Mistake #2: Failing to plan

If you fail to plan, you plan to fail, as the saying goes. Managing your finances and planning accordingly is an essential, but often overlooked, part of investing. It's important to realize that different individuals will have different investment goals depending on their life-stage, their income, and their current expenses. Planning and budgeting according to your goals and obligations will help you make better decisions about your investments. Are you saving up for a car? Are you investing to put a down payment on a house someday? Are you saving for a secure retirement? All of these goals require different plans! For more on Goal-Based investing, check out this article.


Mistake #3: Committing to high fees

You thought Michael Myers was scary? Paying high investment management fees can have a drastic negative effect on your future wealth. Canadians continue to pay high rates for investment products without considering lower fees alternatives. To avoid this mistake, a critical step is to research and compare the types of fees that come along with each investment choice. Lower fees mean more of your money is actually going toward your goals.


Mistake #4: Attempting to beat the market

Attempting to beat the market means selecting investments that will earn an average return that surpasses the average return of the index, net of fees, over a time horizon. Didn’t your neighbour Bob recently tell you how easy it was? The reality is, even professionals who attempt to do this have a dismal track record. Check out the SPIVA scorecard from S&P Global to see just how difficult “beating the market” actually is. The world’s most successful investor, Warren Buffett, suggests we use low-fee index funds to meet our financial goals.


Mistake #5: Jumping on the bandwagon

After a night of trick or treating, we often check our candy before eating it, making sure the wrapper isn't already open, checking the expiry date, etc. Why don't we do the same when it comes to our investments? If you're considering an investment that was recommended to you, it's important to look into it yourself first. What are the fees? How does the investment fit in with your portfolio? How does the investment fit with your goals? Be especially cautious if it is something “popular” as people usually jump on the bandwagon for one reason...


Mistake #6: Trying to get rich quick

There's a lot of misinformation online about ways to get rich quickly. The thing to remember about these schemes is that there is no such thing as getting rich “quick”, and certainly no such things as getting rich quick without taking on tremendous risk. Slow and steady ultimately wins the race. If you understand the principles behind compound interest, you will learn that consistently contributing over time to a diversified portfolio is the most stress-free path to financial success.


Mistake #7: Failing to diversify your portfolio

Kids love Halloween because of all the different costumes and the variety of candy to look forward to. You also need that kind of diversity in your investment portfolio. True diversification means diversity of industries, geographies, currencies, and asset classes. The good news is you can get access to this kind of diversification in one-ticket investments.


Mistake #8: Thinking you can time the market

Market timing is the idea that there are times to be “in” the market and times to be “out”. Trying to time the market is way easier said than done. The truth is, even if you are very confident with your predictions, the market is not something that can always be predicted, and trying to do so can do more harm than good. The old saying goes, “it’s time in the market, not timing the market”.


Mistake #9: Not taking advantage of tax-free accounts

RRSPs and TFSAs have been created to help Canadians invest for their futures. Investing through these accounts provides an opportunity to grow your money tax free. Each account types has its advantages and disadvantages, but both can serve you well if you understand how to use them to your benefit. Check out our free e-guide to learn more about RRSPs and TFSAs.


Mistake #10: Not starting as soon as possible

Every investor ultimately wishes they had started investing earlier. This is because compounding is a very powerful tool, and that power is supercharged when used as early as possible. With the power of compounding, your money will be able to multiply and grow when you start now and invest consistently.

If you think you are too old, you’re not! Although it may have been advantageous to start earlier, now is better than never to take advantage of the power of compounding.


Looking for an easy way to avoid these ten mistakes? Don’t get spooked! Evermore Capital created the Evermore Retirement ETFs as an easy way for Canadians to invest for their retirement. They are a one-ticket investment, meaning you get diversified exposure to a global portfolio of stocks and bonds all within a single investment. They are target date funds, meaning that the asset allocation shifts from equities to fixed income over time, so their volatility decreases over the years as you approach retirement. Lastly, they are low fee, which means you get to keep more of your hard-earned nest egg for yourself. Evermore has taken key principles of retirement investing and put them into a single ETF.

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