We’ve all made mistakes in the market. Admitting defeat is never fun, but it’s better than denying your problems altogether. Today I will reveal some of the mistakes I’ve made and seen other investors make.

The Chartered Financial Analyst Institute published a similar list: 12 Common Mistakes Investors Make. I have modified and expanded their thoughts based on my own experience. I hope it helps your investing endeavors.

1) Not Having A Strategy

Probably the most common mistake for new investors is trading without a strategy. Subscribing to a list of hot stocks is not a strategy – at least not when it’s the only thing you use. Educate yourself. Don’t worry if it takes some time before you buy your first stock. Understand your strategy and make decisions that match your strategy.

2) Not Knowing Your Limitations

Competition for success in the financial markets is fierce and brutal. If you think you can make a few bucks per trade because of your good data, fast computer, and superior trading abilities, think again. You are up against the most sophisticated investors in the world with the best equipment money can buy. You won’t win at that game – at least not consistently. Try to understand what you can and can’t do in the markets and act accordingly.

3) Acting on Tips

You’re listening to a friend or relative describe in hushed tones the next big Apple, Google, or Starbucks. Greed takes control as you unconsciously turn off the fear alarm. You’re sucked into the story so you buy the stock. Then you buy just before the stock tanks along with your hopes. Acting on stock tips is an easy mistake when you don’t have a coherent strategy.

4) Having Unrealistic Expectations

Way too many so-called “educators” teach investors unrealistic expectations about their portfolios. Infomercials abound with rags-to-riches millionaires who started with $10,000 and are now living on a beach. These are not typical results, even if they’re true. Make sure you understand the realistic possibilities for returns over time.

5) Letting Fear Paralyze You

Especially after the 2008-2009 crisis, it’s easy to blame others for your market losses. Yet fear may be even more of a threat to your portfolio. Warren Buffett is fond of saying, “Be fearful when others are greedy and to be greedy only when others are fearful.” Emotional investing can be just as bad on the selling side as it is on the buying side. Don’t let fear stop you from making good investment decisions.