Investing is a great way to grow your money because you may earn more over time than you can with other savings options. That means you could reach your goals faster.

As a new investor, it’s just as important for you to know what to avoid as it is to understand the basics of how to invest. We’ve highlighted four common newbie mistakes.

Mistake 1: Being Impatient

Lots of people think that as soon as they make investments, as long as they pick the right ones, they should see fast growth. That’s a recipe for disappointment. It could lead to falling for fads or making the mistake of selling solid investments because they didn’t live up to expectations fast enough.

How to Avoid It

The truth is, with a very few exceptions, investing is a long game where your money grows over time. Don’t expect to see immediate, miraculous results. Instead, concentrate your efforts on finding investments that demonstrate steady growth.

Mistake 2: Not Reviewing or Rebalancing the Portfolio

Some people start off by choosing investments they think will work for their portfolio and then never make any changes. Others set up accounts like retirement funds and keep the default choices without any further thought. However, these aren’t necessarily the best strategies for maximum long-term growth.

How to Avoid It

Stay on top of your portfolio—check it often to review how it’s performing and whether you have the right mix. Keep in mind that when the market shifts, you may need to make adjustments. Experts suggest you rebalance your portfolio at least once a year your portfolio at least once a year. If you’re uncertain how to do it, you can always consult a financial advisor.

Mistake 3: Not Diversifying

It can be tempting to put all your money in an investment that has excellent growth, but have you ever heard the saying, “Don’t put all your eggs in one basket”? It means there’s more risk in putting all your money in one place than there is in putting it in a lot of different types of investments—or diversifying your investments. Why? Because if there’s ever a slump, you have no other investments to balance against it.

How to Avoid It

Choose a combination of investments like mutual funds, stocks, bonds and/or exchange-traded funds (known as ETFs). And, when you’re looking at companies to invest in, choose more than one type of industry. It’s an effective way to balance your risks versus rewards.

Mistake 4: Being Afraid

If you’re concerned that investing might be too risky, consider this. Given past and projected rates of inflation and the average return on savings accounts, keeping too much in cash could cost you.

How to Avoid It

It’s important to understand that even with dips, the market recovers over time. Look at how it performs over 10 or 20 years, not over months.

Learn the basics, keep your plan simple and build up slowly. If you’re uncomfortable going all in, all at once, start small and consider setting up a system to automatically increase your contribution by 1% every few months until you’re comfortable.

Help When You Need It

Learning how to make the right investment choices will take time. It will help if you work with a team you can trust. If you’d like to discuss your options or need help developing an investment plan, Navy Federal has professional financial advisors ready to serve members nationwide.

Nondeposit investment and insurance products are offered through Navy Federal Financial Group, LLC (NFFG) and through its subsidiary, Navy Federal Brokerage Services, LLC (NFBS), a member of FINRA/SIPC and an SEC registered investment advisory firm. Brokerage and advisory products are offered through NFBS. These products are not NCUA/NCUSIF or otherwise federally insured, are not guaranteed or obligations of the credit union, are not offered, recommended, sanctioned, or encouraged by the federal government, and may involve investment risk, including possible loss of principal. 1-877-221-8108. 

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.