90% of investors make these 5 mistakes

Making a mistake will make you scratch your head and think about what you've done wrong. But making additional mistakes will surely make you want to quit.

I want to prevent this from happening by letting you know what the five common mistakes are that investors make, so you won't fall for them.

Number one: the so-called Financial or stock market gurus

These are the so-called personalities who tell you what to buy and when to sell. They might also end up screaming their predictions.

You should always be cautious when someone is giving you investing advice. Sometimes there are financial incentives that come into play in advising you what to buy.

Always question the information you receive and that your guru has those investments he or she is pitching to you in their own portfolio. Gurus know how to tap into people's fears and emotions in order to get them to take action.

Following the herd is also very risky. Instead of following a guru you're following along everybody else. So, if there are family members or even colleagues at work who will tell you what to buy and sell, you listen to them without even doing your own research first.

This is very dangerous and this is how people lose their money, by listening to hot tips.

You don't want to follow the herd, they're easily influenced and they act on emotions only when it comes to investing in the stock market. The herd is not logical, whatsoever, and they only follow the latest trends hoping to get rich quick.

Number 2: not being patient and expecting wealth immediately

It goes without saying that people invest in the stock market in order to get rich, save for retirement or maintain the wealth they have accumulated. Being impatient and expecting results too soon will leave you disappointed and open to make mistakes.

Every one of us has heard stories about investors making millions out of small investments. Most of these stories are anomalies, because the majority of investors have to invest for the long-term in order to see significant gains in their investments.

Of course, it is possible to make a ton of money fast, but that is also very risky. The higher the risk in your investment the higher the potential reward could be, but it could also be your downfall.

Number 3: not enjoying the investing process

You don't need to be passionate about investing in order to make it work in your favor, but you need to have some interest in investing. If the thought of doing your due diligence to decide which companies to invest in does not spark your interest, then it is best to invest passively which is investing in mutual funds, ETFs or index funds.

There is absolutely nothing wrong with being a passive investor and it's also recommended for beginning investors.

That's how I started, by investing in mutual funds, bonds and index funds. I quickly learned that investing was not too hard and I thought it was kind of interesting. I then switched from being a passive investor to being an active one, researching individual companies I want to invest in, buying them when they are undervalued and making sure my asset allocation is up to date.

Number four, giving up too early on the market

Many of us have had a bad experience with the market or know someone who has.

Stock market crashes occur far too frequently, leaving investors disappointed, frustrated and stressed out.

Many investors also get scammed into investing in shady companies, which end up crashing on the stock market. Like my dad, who got contacted by an investment firm to invest in this particular mutual fund poised for growth.

He ended up losing all his money and swore never to invest again. Luckily, I've been able to show him the error of his ways and he has become an avid investor. I actually need to slow him down from not buying too many stocks, especially when they are overvalued.

If you're ready to give up, DON'T. Try to figure out what you did wrong and ask for help if you need to. The stock market is still one of the best ways to build wealth.

Number 5: jumping in with no goals

Goals are your road map to success. Without a map you will never be able to reach your destination. Imagine traveling from Kansas to New York without a map. You will have a much more pleasant travel experience with your map in your reach.

This also applies to investing. You need to have a goal. Are you planning on day trading for a living? Or do you want to invest in penny stocks? Maybe you're investing time horizon is only 10 years.

These things will influence your investment strategy. It's okay to start out and test the waters without a plan in the beginning. But you quickly find out that you need a long-term goal which will have a major impact on your asset allocation.