Although making mistakes is a natural part of the learning process, it is important to be aware of the frequent failures of those who enter the investment world. By being aware of them and how to avoid them, you can get more out of your money and have more security when investing.

Below, I show you 5 mistakes of the beginning investor and what to do to prevent them from happening in your path!

1. Do not assemble the emergency reserve

Often, due to the excitement of entering the financial market, beginning investors start making investments without having an emergency reserve . This is a mistake that requires attention as it can undermine security and the continuity of the strategy.

In practice, the emergency reserve corresponds to an amount available to cover financial unforeseen events . As the name says, it is used in cases of emergencies and atypical situations, avoiding indebtedness.


To provide security, it is recommended that it has a value equivalent to 6 months of living expenses , at least. Furthermore, it is important that the reserve is invested in a product or asset that can be redeemed at any time and that is as secure as possible.

An alternative to maintain the emergency reserve is the Treasury Selic Simples fund , from BTG Pactual digital. In this way, it is possible to guarantee financial availability whenever you need it, as well as greater security.

Therefore, the beginning investor must consider the formation of the reserve in their financial planning . After all, it manages to bring greater financial stability in various situations, such as job loss or other unforeseen events.

On the other hand, if the investor chooses to diversify contributions from the beginning, without this amount, it may be necessary to redeem or sell assets in advance. With this, it is possible to face unfavourable conditions, including the loss of money.

2. Focus on profitability and forget about risk

Another common mistake for novice investors concerns the composition of the investment portfolio. Faced with so many alternatives in the market, it is very common that there is an excessive focus on profitability.

This happens because the investor is seduced by the results and starts to want them in his investment strategy. However, this greater attention to profitability is often linked to a disregard for risk. As a result, the choices may not be appropriate.

This is the case of those who start investing in stocksreal estate funds or even crypto actives because they have followed an interesting return. In this situation, it is normal for the investor to believe in a constant positive return, when, in fact, it is the result of fluctuations and market movements.

Without understanding this issue, investors may be led to redeem resources during market declines, motivated by fear or anxiety. The reason is that he will not be prepared for the volatility of investments and, therefore, it is possible to have financial losses.

Instead of just measuring the return potential, it is also necessary to understand the risk and its relationship with the investor profile. Also, consider the effects of a decline and the behaviour of investment in the past in the face of fluctuations.

3. Estimate an unrealistic profitability

Having a very optimistic attitude regarding the profitability that can be obtained by investing money is another recurrent mistake. The reason is that investors who do not have much experience yet tend to project a return that, in practice, may not materialize.

This is because those who start investing now tend to link the result to their own ability to save, choose investments and manage the portfolio. However, profitability also depends on other factors that are not under the investor’s control.

Therefore, unrealistic projections can cause frustration and lead to incorrect or riskier decisions than necessary. Excessive optimism, by the way, may be associated with a lack of knowledge of what is, in fact, possible in the market.

Mega investor Warren Buffett, for example, has a portfolio with an average annual return of 20%. The average value was obtained based on the history of decades and can serve as a reference.

After all, if a person projects an above-average gain for one of the world’s biggest investors, there are likely to be errors in the analysis. Therefore, it is essential that the novice investor has humility and caution in the initial estimate to reach realistic values.

4. Think about products and not allocation

There is one more failure that is usually committed by those who start to invest: the exclusive attention to certain products or assets, individually. Typically, this happens when the beginning investor has a distorted view of portfolio formation.

In an analogy, it’s as if he sees investing as a horse race, in which he has to pick the winner. In this case, represented by the investment that presents the highest return.

However, what is most important is allocation, that is, how resources are distributed in the investment portfolio. This division makes a difference, not least because studies show that more than 90% of the portfolio’s results result from allocation.

Now, it is worth knowing the alternatives that the financial market offers to choose the most suitable for your case. Know that, regardless of the amount you have available, there are several options to invest.

As distribution is a factor that generates profitability, it is necessary to look at your investments as a whole and not product by product. After all, each investment has a function, contributing to the result of your portfolio.


5. Choosing a financial institution with poor service

It is not just the choice of investments that affects the result or that can motivate mistakes in the beginning investor. The decision of the institution that will be used to intermediate your investments is also fundamental , but it is not always considered.

This is what happens when an investor is dedicated to studying financial market strategies and opportunities , making good choices, but selecting an institution only by cost, for example.

By failing to assess other factors, investors may face some problems on their journey. This can happen if you do not evaluate the service, you may not have someone to turn to if you need to clarify doubts.

Also, office hours can be very restricted. In this situation, the investor will likely need to sacrifice time from their own work to solve problems.

That is why it is essential to look for a financial institution that has excellent service. With BTG Pactual digital you have access to 24-hour service and can ask questions at any time via phone, email or chat.

Now that you know what the beginning investor’s mistakes are , it’s critical to act to avoid them. With these precautions, you will have more security to make investments and seek better results in your portfolio.