10 mistakes over 11 years, and the most expensive one cost me a full year of compounding before I had bought a single fund. I waited for a dip. Not one of the ten was a bad fund choice; every single one was a process failure, and every single fix is a rule written down in calm weather so that a frightened version of me cannot overrule it later.
If you only read my recent articles you might get the impression it was a straight line: pick a broad UCITS ETF, automate the purchases, ignore the noise, done. It was not. It was a series of expensive, occasionally embarrassing detours, and the tidy system I run today exists precisely because of them. This is the letter I would send my younger self — ten mistakes in roughly the order I made them, what each cost, and the specific fix that ended it.
This article is the letter I would send my younger self. Ten mistakes, in roughly the order I made them, with what each one cost me — sometimes in euros, more often in years — and the specific fix that ended it. I have kept the numbers qualitative or illustrative on purpose. The exact damage matters less than the pattern, and the patterns are almost universal: I have yet to meet a self-directed investor who has not made at least half of these.
If you are early in your investing life, my honest hope is that you steal the fixes without paying the tuition.
Mistakes 1–3: the ones that cost me time
Mistake 1: Waiting for the dip that never came. In my first year I had money ready, a fund picked, and a conviction that markets were “obviously expensive.” So I waited. Markets rose. Now they were even more expensive, which surely made the coming correction bigger — so I waited more. By the time I finally bought, I had paid a higher price than the day I first hesitated, plus a year of dividends and growth forgone. The uncomfortable research finding is that lump-sum investing beat cost averaging between 61.6% and 73.7% of the time in Vanguard’s study of seven markets over rolling one-year periods from 1976 to 2022 — roughly two years in three, simply because markets go up more often than they go down. The fix: a written rule that money for investing gets invested within a fixed number of days of arriving, no market opinion allowed. Time in the market is not a slogan; it was the single most expensive lesson of my first three years.
Mistake 2: The five-ETF portfolio that was really one. Around year two I felt sophisticated, so I built a “diversified” portfolio: a world fund, an S&P 500 fund, a NASDAQ-flavoured tech fund, a dividend fund, and a European fund. Five tickers. It felt like diversification. It was actually the same few hundred mega-cap companies bought three or four times over, with extra spreads, extra rebalancing headaches, and a false sense of safety. When US large caps fell, everything fell together, which is exactly what diversification is supposed to prevent. The fix: I eventually merged the lot into a much simpler core, and I built the habit of checking holdings before buying anything new — the exact problem my ETF overlap calculator now exists to solve in thirty seconds.
Mistake 3: No written plan until year six. For six years my “strategy” lived in my head, which meant it quietly rewrote itself whenever markets or moods changed. Every article I read nudged the plan; every drawdown renegotiated it. The portfolio accumulated one-off decisions the way a junk drawer accumulates cables. The fix: a one-page investment policy — what I buy, when I buy, when I rebalance, what would make me sell, and what I am explicitly not allowed to do. Writing it took an afternoon. It has since overruled my worst instincts a dozen times, which makes it the highest-return afternoon of my investing life.
Mistakes 4–6: the ones that cost me money
Mistake 4: Buying the USD listing and paying FX every month. Early on I bought the US-dollar listing of a fund on a foreign exchange because it looked more “official,” while my salary arrived in local currency. Every single monthly purchase triggered a currency conversion fee, and for a while I paid it without noticing, because it was baked into the exchange rate rather than itemised. Small percentage, every month, for years — the worst kind of leak, invisible and recurring. The fix: buy the listing that matches the currency you earn in, or hold a currency-matched sub-account, and always read the FX fee line before choosing where an order executes. This one mistake taught me more about broker cost structures than any comparison table.
Mistake 5: Chasing a hot sector fund after its best year. You already know this story because everyone has a version of it. A sector had a spectacular year, the financial media anointed it the future, and I bought in — after the run, at the peak of the narrative. What followed was a long, grinding underperformance while my boring core quietly did its job. The behaviour is so common that Morningstar measures it: Mind the Gap 2025 found the average dollar in US mutual funds and ETFs earned 7.0% a year over the decade to 31 December 2024 against those funds’ own 8.2% — a gap of 1.2 percentage points a year, created purely by when investors put money in and took it out. It is a US-fund study and its methodology has been challenged in the academic literature, so treat it as a strong signal rather than a precise law. I was, for that stretch, a data point. The fix: a rule in the written plan — no thematic or sector purchases in the twelve months after a headline year, which in practice means almost never.
Mistake 6: Treating TER as the whole cost. For years I picked funds by sorting on total expense ratio, convinced that 0.07% beat 0.20% end of story. Then I actually compared my returns against the index and discovered that spreads, tracking difference, and my broker’s order fees mattered as much as the headline TER — sometimes a “cheaper” fund cost more to own. Securities lending revenue, replication method and fund size all feed the real number. The fix: I now evaluate total cost of ownership, not the sticker, a process I documented fully in TER versus the total cost of owning an ETF. The TER is one line in that calculation, and often not the biggest one.
Mistakes 7–8: the ones that nearly broke the strategy
Mistake 7: Checking the portfolio daily in 2020 — and nearly selling everything. March 2020 was my first real crash with meaningful money invested. I had read all the right books, and none of them prepared me for watching years of savings evaporate on a screen I was refreshing between meetings. Checking daily turned a market event into a personal emergency; every red day demanded a response. I got as far as opening the sell order screen. What stopped me was luck and one dumb question I asked myself: “will companies stop existing?” I later unpacked the whole psychology of that moment in why investors panic-sell ETFs, because I now believe the panic mechanism, not fund selection, is where most private investors actually lose. The fix: I deleted the broker app from my phone, moved monitoring to a scheduled monthly session, and wrote a crash protocol in advance — my bear market checklist is the public version of it.
Mistake 8: Ignoring my country’s tax rules until filing season. I spent my early years optimising funds to the basis point while ignoring taxation entirely, on the theory that taxes were a problem for future me. Future me was not amused. Accumulating versus distributing share classes, fund domicile and withholding tax, how my country treats foreign dividends, what records the tax office expects — every one of those was a decision I had unknowingly made badly by default, and unwinding positions later meant realising gains at the worst possible moment. The fix: one focused weekend learning my national rules, choosing tax-appropriate share classes, and building a records folder that fills itself as I go. Tax is boring exactly until it is the largest line item in your annual costs, as I explained in the ETF tax efficiency guide.
Mistakes 9–10: the subtle ones
Mistake 9: Confusing activity with progress. There was a stretch around year four when I “worked on” my portfolio constantly — reading, tweaking, swapping one fund for a near-identical one with a marginally better factsheet. Each trade felt productive. Collectively they were churn: spreads and fees paid to move between funds that would perform almost identically, plus taxable events created for nothing. The research backdrop makes this sting more: across 15-year horizons the SPIVA scorecards find no fund category in which a majority of active managers beat their benchmark — and there I was, an amateur, actively managing index funds. The fix: a rule that any portfolio change needs to survive a 30-day waiting period and a written justification. Most proposed changes do not survive the wait.
Mistake 10: Judging decisions by outcomes instead of process. Early on, when a lazy purchase went up, I concluded I was skilled; when a well-researched one dipped, I concluded research was pointless. Both conclusions were wrong — in markets, good decisions and good outcomes are only loosely connected over short periods, and learning the wrong lesson from noise compounds just like money does. The fix: I keep a short decision journal. One paragraph per decision: what I did, why, what I expected. Rereading it yearly is humbling and clarifying in equal measure, and it is the reason the other nine mistakes stopped repeating.
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The system that ended the mistakes
Notice the pattern in the fixes. Not one of them is a cleverer market opinion. Every single one is a piece of process that removes a decision from the moment of emotion and moves it to a calm moment in advance. That, condensed, is what 11 years taught me: I could not upgrade my instincts, so I built a system that routes around them.
The system today is almost disappointingly small. A boring, broad core portfolio held on a buy-and-hold basis. Automated monthly purchases that execute whether I am confident or terrified. A one-page written plan that outranks my opinions. A pre-purchase routine — essentially my 10-point ETF due diligence checklist — for the rare occasions something new enters the portfolio. And one scheduled annual review where rebalancing, tax paperwork and the plan itself get their yearly service.
Everything on that list exists because of a specific scar described above. The automation exists because I once waited a year for a dip. The checklist exists because I once owned the same 500 companies five times. The annual-only review exists because I once nearly sold everything on a Tuesday in March. If you are starting today, you can have the system without the scars. That trade — my tuition, your discount — is the entire reason this article exists.
Sources, checked 26 August 2026: Vanguard on cost averaging versus investing immediately; Morningstar Mind the Gap 2025; the S&P Dow Jones Indices SPIVA scorecards. Everything else on this page is my own experience and is labelled as such. Educational content, not personal advice.
Frequently asked questions
Q: What is the most expensive investing mistake on this list?
A: Waiting for a dip that never came. Fees and fund choices cost basis points; sitting in cash during a rising market cost me a full year of compounding at the start, when time is worth most. Behavioural delays and panic-selling dwarf product-selection errors for almost every private investor I know.
Q: How do I know if my ETFs overlap too much?
A: Check what is inside them rather than counting tickers. If two funds share most of their top holdings – a world fund plus an S&P 500 fund is the classic case – you own duplication, not diversification. Run both funds through an overlap check before you buy the second one.
Q: Is checking my portfolio daily really that harmful?
A: In a falling market, yes. Daily checking turns a market event into a personal emergency and manufactures a decision every red day. Moving to a scheduled monthly review, with a crash protocol written in advance, removes the decision entirely.
Q: Do I really need a written investment plan?
A: One page is enough: what you buy, when you buy, when you rebalance, what would make you sell, and what you are explicitly not allowed to do. Its value is that it was written when you were calm and it outranks whatever you feel during a drawdown.
Q: Should beginners avoid sector and thematic ETFs completely?
A: Not completely, but not in the twelve months after a headline year either, which is when almost everyone actually buys them. Morningstar’s Mind the Gap work measures the cost of that timing at around 1.2 percentage points a year for US fund investors. If a theme genuinely convinces you, size it small and buy on your normal schedule.
European UCITS/ETF investor with 11+ years building a global dividend and index portfolio, and founder of Financial Expert Class. I write every guide here from first-hand experience investing across EU brokers and tax regimes — not theory. More about me →