Are you making any of these 10 investment mistakes?

Mistake #1: Not having a plan

Having a financial plan with clear financial goals goes a long way in building a strong investment portfolio. This is an area that many investors underestimate. Setting financial goals means that you can be more confident about the investments you make and their potential returns. If structuring a plan like this feels intimidating, seek help from your financial adviser - their expert advice is invaluable.

Mistake #2: Not understanding your risk profile

Investors are usually put into three categories according to their risk tolerance: conservative, moderate or aggressive. If you know what your risk profile is, you're more likely to set realistic financial goals that suit your personality.

Mistake #3: Not understanding your investments

You should never invest in something you don't understand. Take the time to research the investments you want to make and consult with your financial adviser before making any decisions.

Mistake #4: Overlooking fees

It's easy to become so wrapped up in your investment's returns that you forget about the fees. The fees for your investment will be deducted before you get to enjoy the returns. These could include admin fees or financial adviser fees, for example.

Mistake #5: Diversifying incorrectly

The main idea behind diversifying is not putting all your eggs in one basket. You want to have different amounts of money invested in different kinds of assets to reduce your portfolio's overall risk. If you get this balance wrong, your portfolio might start to weaken. A financial adviser can help you to construct a strong, diversified financial portfolio.

Mistake #6: Having unrealistic expectations

The returns you can expect to earn from your investment depend on many things, like your risk profile or how much time is left until you retire. Economic factors, like recession and inflation, will also affect the returns you could earn. Keep these things in mind when you want to estimate how much income your investment will generate.

Mistake #7: Withdrawing too early

Investors tend to cash in their investments if they need the money, or as a reaction to market movements. It's important to remember that markets change: they might dip, but they will recover. Stay focused on the long term. Remember the financial plan that you worked out with your financial adviser and do everything possible not to cash out early.

Mistake #8: Not monitoring your portfolio

Your portfolio is going to change over time. You and your financial adviser should review your investments regularly to make sure that your plan is still relevant to your needs.

Mistake #9: Waiting too long to invest

When it comes to investing, time is your friend. Start now. The sooner you start, the more returns you stand to earn later on, even if you only invest a small amount now. Investing early can allow you to take risks, build discipline, earn compound interest - and it gives you a more stable financial future.

Mistake #10: Underestimating inflation

The value of money changes over time. So the money you invest today is worth more than money you invest in two years' time. Consult with your financial adviser to invest aggressively enough and use time to your advantage to make sure your money keeps up with inflation.

Investing can be one of the best things you can do for yourself, especially if you avoid making mistakes like these. If you want to learn how to keep your investments performing, read more here.