10 Common Mistakes New Australian Investors Make

The ASX’s Australian Investor Study found that 7.7 million Australian adults now hold investments listed on an exchange, up from 6.6 million just three years earlier, and nearly a quarter of that new wave are aged between 18 and 24 (Prashant Mohan, 2023).
That’s a fantastic trend, as more people are building wealth outside of the family home. Voluntary investing alongside compulsory super, is good for individuals and good for the economy. But talk to any financial adviser, accountant or long-time investor and they’ll tell you the same thing, almost everyone who starts out makes a handful of predictable, avoidable mistakes. Here are the ten that come up again and again.

Treating investing like gambling

New investors are especially prone to chasing whatever’s trending in the market. That could be a mining stock which has rumors circulating, or a crypto coin some stranger online is trying to sell you. The problem isn’t those speculative plays themselves, but rather that they’re being treated as a strategy rather than a bet (Brian J. Bloch, 2022).
Speculative investment is a legitimate personal choice, provided it is approached with discipline. Investors who wish to allocate a portion of their funds to higher-risk, speculative positions should do so consciously, clearly distinguishing that capital from funds intended for genuine long-term investment, and ensuring the two are not permitted to intermingle.

Being clear on your priorities

When investors were asked to identify their financial goals, taking a holiday was ranked as the most commonly cited motivation for investing. The time bound and liquid nature of such an investment goal must then be central to your investment strategy.

Research by the ASX suggests that a significant proportion of investors are entering the share market without having first established what they are trying to achieve, or over what timeframe. In the absence of that foundational step, individual investment decisions tend to become reactive rather than deliberate.
Keeping track of why you’re investing in the first place ensures that you do not involve yourself in opportunities that do not align with your goals.

Putting all your eggs in one basket

Home bias is a well-documented phenomenon everywhere in the world, but Australians take it to another level. It’s easy to understand why, as our banks and miners are familiar, they pay solid franked dividends, and the ASX is what shows up on the evening news.
A portfolio that’s 100% ASX-listed shares is making a fairly big bet on the fortunes of Australian banks and commodity prices, whether the investor realises it or not (MLCAM, 2024).
Younger investors are actually shifting away from this pattern faster than older generations. International share ownership among 18 to 24 year olds grew nearly twice as fast as it did among older wealth accumulator investors between 2020 and 2023, but plenty of new investors of every age still start out 100% local without meaning to (Juliette O’Brien, 2025).

Ignoring fees because they seem small

A 1% difference in ongoing fees sounds trivial. Compounded over 20 or 30 years, it can quietly eat a genuinely large chunk of your final balance. This is often tens of thousands of dollars on an average portfolio. New investors tend to focus on the sticker price of a trade (brokerage per transaction) while overlooking the ongoing management fees baked into managed funds or some ETFs (Vanguard, 2022).
Both matter, but it’s the recurring ones that do the real damage over time, simply because they compound. Modern trading apps have made buying and selling shares as easy as ordering food delivery, and that ease has a cost.
Frequent trading racks up brokerage, tends to trigger more capital gains tax events, and according to a large body of behavioural finance research, is correlated with worse returns than a steadier buy-and-hold approach.
Retail investors on the ASX now execute an average of around 12 trades a year, with a median trade size of about A$5,500, and while that’s not excessive on its own, the pattern among newer, less experienced investors tends to skew toward far more frequent, sentiment-driven trading rather than a considered process (Sydney Morning Herald, 2022).

Panic-selling when markets wobble

Markets can regularly fall and sometimes sharply. 2025 was a reminder of this, as after a strong run through most of the year across nearly every major asset class, November brought a sudden spike in volatility as sentiment turned cautious. Investors who’d only ever seen markets go up were caught off guard.

Selling during a downturn locks in a loss that would otherwise have simply been a bad few weeks on paper. It’s one of the single most common ways new investors turn a temporary dip into a permanent one (Money Smart, 2026).

Confusing “well-known” with “well-researched”

Just because a company is a household name doesn’t mean it’s a good investment at the current price. Similarly, just because a stock is unfamiliar doesn’t mean it’s risky. New investors often buy shares in businesses purely because they use the product or recognise the logo, without ever looking at a balance sheet, a profit history, or a valuation (Wall Street, 2025).
Brand familiarity is a reason to look closer, not a reason to buy.

Underestimating how much emotion drives decisions

Fear and greed aren’t cliches, they’re measurable, and they hit new investors hardest, simply because they haven’t lived through a full market cycle. Buying because everyone else is buying, selling because everyone else is selling: both work against you more often than for you (Investopedia, 2023).
Having a plan written down before emotions run high and actually sticking to it is a benefit in which an investor can give themselves.

Not understanding what they actually own

ETFs have surged in popularity among Australian investors, and for good reason as they’re a simple, low-cost way to get diversified exposure. However, ETFs aren’t a single category. Some track a broad global index whilst others are concentrated in a single sector, a single theme or use leverage to amplify returns and losses alike (RMIT University, 2026).
New investors sometimes assume all ETFs behave the same way a broad index fund does, and get an unpleasant surprise when a diversified fund turns out to be anything but.

Never asking for help

You don’t need a full financial plan to benefit from one conversation with a licensed adviser, an accountant, or a community of experienced investors who’ll ask the questions you haven’t asked yourself yet.
Australians have historically been reluctant to seek financial advice, often assuming it’s only for the wealthy or that they don’t have “enough” to justify it. But the ASX’s investor research also found a rising number of newer investors, particularly women entering the market for the first time.

None of these mistakes are unique to new investors, and none of them are fatal. They’re simply part of learning, and the good news is that awareness of them is often the biggest step toward avoiding them.

Happy Investing!

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