As a financial advisor, I have helped hundreds of clients with their finances over the course of my career. Clients come in with concerns often having already made a misstep or two, but I’ve observed some common investing mistakes that can easily be avoided. I’m happy to share the top 10 investing mistakes to steer clear of so you can set yourself up for success for years to come.1. Not Having an Adequate Emergency Savings Account. You may be wondering, What does an emergency fund have to do with investing? Well, if you were to encounter a significant and unexpected expense, for example a hospital stay or home damage, not having at least the sum of three to six months of your average monthly household expenses saved in cash will likely require you to either take on very expensive credit card debt or require you to withdraw funds from your investment accounts. Subscribe to Kiplinger’s Personal Finance Be a smarter, better informed investor. Save up to 74% Sign up for Kiplinger’s Free E-Newsletters Profit and prosper with the best of Kiplinger’s expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail. Profit and prosper with the best of Kiplinger’s expert advice – straight to your e-mail. Doing the latter can trigger significant taxes and penalties and make a major dent in your quest to achieve future investment goals.2. Not Investing Enough for the Future in Your 20s and 30s.It can be challenging to save and invest sufficiently in the early years of your career. Housing, student debt and having a lower salary can result in having less funds available to save within an IRA and/or a 401(k). However, through some nifty expense management and investing in your skills (ie, your human capital), you can actually sock away meaningful amounts each year. In doing so, you can harness the power of compounding. This is the ability of an asset to generate earnings which, when reinvested or kept invested in the primary asset, will generate additional earnings.3. Not Increasing Your Maximum Retirement Contributions Over Time. With fairly common regularity, the IRS will increase the maximum amounts that can be invested within retirement investment accounts. In fact, said limits were recently increased starting in 2023 (opens in a new tab). Beginning next year, the amount an individual can contribute to a 401(k), 403(b) and most 457 plans increases to $22,500, up from $20,500 in 2022. IRA contributions can top out at $6,500, an increase of $500 from the current $6,000 annual limit. Not remembering to adjust your annual contribution amounts to take advantage of these increases means that you’re losing out on the chance to sock away even greater amounts to compound over time.4. Believing That Owning More Than a Few Securities Means You’re Properly Diversified But how do you know if you’re adequately diversified? Simply purchasing more than a few stocks and/or mutual funds isn’t enough if they all generally move in the same direction at the same time (ie, they are all highly correlated with one another). one that has securities that are invested in various asset classes and geography that are uncorrelated with each other. As the saying goes, avoid putting all of your eggs in one basket. Chasing Recent Performance.It’s understandable to look at how a particular investment vehicle has performed in the past as a guide for whether you should invest in it now. However, there’s a reason why the adage “past performance isn’t a guarantee of future results” has resonated for so long. The investment landscape changes over time – sometimes very quickly and unexpectedly. Instead, spend time to understand the future prospects of an investment and how it fits within your overall portfolio.6. Trying to Constantly Time the Market. Simply put, trying to time the market is a fool’s errand. No human or algorithm has proven to correctly pick individual winners based on short-term market swings over a long-term time horizon, so you shouldn’t try to do so either. Attempting to will also possibly trigger trading fees and taxes, as well as take a tool on your mental health. Creating a long-term plan with an investment strategy to match will yield positive results consistently, while the timing of the market will inevitably backfire at some point.7. Taking Financial Advice From Friends or Colleagues.It’s human nature to want to imitate the behaviors of successful people. However, it’s also common for people to highlight their success and conveniently ignore their failures.Avoid following the water cooler chatter on how to invest.Instead, work with a Certified Financial Planner to help you construct an appropriate portfolio that’s aligned with your personal goals. 8. Not Recognizing Your True Appetite for Investment Risk.All too often, people focus on the potential rewards on investing in a certain way without adequately recognizing the risks of making the investment. When it comes to an investment security, look at the standard deviation which measures the overall level of expected volatility. If a media frenzy on a particular asset plummeting keeps you up at night, it’s time to re-evaluate your portfolio for risk assessment.9 . Not Implementing Asset Location. Not all investment account types are taxed in the same way. Current tax law mandates that the gains that occur within each of the three major account types (tax deferred, taxable and after-tax) are all taxed differently. Since future tax rates are unknowable with absolute certainty, a wise tax mitigation strategy is asset location , meaning you would open, and fund over time, at least one account within each category. Specifically, a brokerage account (which is taxable), a retirement account such as a traditional IRA (tax deferred) and a Roth IRA (after-tax). Comparing Yourself to Others. Investing is a behavior pursued in the aim of increasing one’s wealth. Don’t let that pursuit serve as a main driver of your overall happiness. Don’t beat yourself up because you didn’t invest in the same way as others. Mistakes will occur.Working with a professional wealth advisor is a great way to help define what happiness really means for you and how you can enjoy many well-lived todays and tomorrows.When you are just starting out with investing, it’s a given that you will make some of these mistakes. But over time, the goal is to learn, grow with your team of trusted advisors and build a diversified portfolio that grows your wealth.Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC registered investment advisor located in Long Beach, California . Registration does not imply a certain level of skill or training. Additional information about HH, including our registration status, fees, and services can be found at www.halberthargrove.com. This blog is provided for informational purposes only and should not be construed as personalized investment advice. It should not be construed as a solicitation to offer personal securities transactions or provide personalized investment advice. The information provided does not constitute any legal, tax or accounting advice. We recommend that you seek the advice of a qualified attorney and accountant. This article was written by and presents the views of our contributing advisor, not the Kiplinger editorial staff. You can check advisor records with the SEC (opens in a new tab) or with FINRA (opens in a new tab).