I Have a Masters in Business.
I Still Made Every Beginner Investing Mistake.
Shayma Solli
Founder, The Capital Edit
Published
May 9, 2026
Read time
11 min read
Last updated
May 2026
I finished first in my finance class.
I could explain asset allocation, portfolio theory, and risk-adjusted returns easily.
Then I invested my own money for the first time and realized theoretical knowledge and emotional decision-making are two completely different skills.
I lived in that gap for years. And I made expensive mistakes along the way, not despite my background, but sometimes because of it. A little knowledge, it turns out, can make you more confident than you should be.
Around 2018, while freelancing in Tunisia after finishing my Master’s degree, I became obsessed with a question I suspect you’ve asked yourself too:
“How do people make their money work for them instead of working for money forever?”
I started consuming everything I could find about investing, crypto, financial freedom, and wealth building — books, forums, podcasts, YouTube channels, anything that promised to show how wealth was built beyond a salary.
Some of it genuinely helped. Some of it was expensive nonsense. And some of it taught me lessons that permanently changed how I think about money, risk, and investing.
This article is the story of how I started investing, where I got it wrong, and what the research says about why so many beginners make the exact same mistakes.
Quick Answer
What Are the Most Common Beginner Investing Mistakes?
Beginner investing mistakes fall into four categories: (1) chasing quick returns, (2) investing without a plan, (3) buying assets you don’t understand, and (4) concentrating positions without diversification. DALBAR’s 2024 research found that the average equity investor earned 5.5% less than the S&P 500 in 2023, a gap often linked to emotional decision-making.
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Not financial advice. Everything on The Capital Edit is for educational and informational purposes only. Always conduct your own research or consult a qualified professional before making investment decisions. Read our full Disclaimer →
- Why I Became Interested in Investing
- How I Actually Started Investing
- Shifting From Speculation to Long-Term Investing
- My Investing Philosophy Today
- Why Ethical and Halal Investing Became Important to Me
- What I Would Tell Beginner Investors Today
- Why I Created The Capital Edit
- Final Thoughts
- The Halal & Ethical Investor Starter Kit
- Frequently Asked Questions
- Sources
Why I Became Interested in Investing
My interest in investing became personal when I realized earning more wasn’t enough.
Growing up, I watched my parents build multiple income streams, invest in assets, and constantly look for opportunities to make their money work for them. It showed me that financial stability often comes from building assets, not relying on a single paycheck.
During my Master’s studies in business, I learned the theory behind economics, finance and markets. But theory does not prepare you emotionally for the moment your own savings are on the line.
Freelancing in Tunisia added another layer. Income fluctuated. Currency realities made saving feel limiting. Financial independence felt both urgent and distant at the same time.
So I went searching for answers online.
The internet, as it turned out, had plenty of answers. Much of it was full of unrealistic promises.
How I Actually Started Investing
I did not start with a strategy, a plan, or meaningful capital.
I started with curiosity and small amounts of money I honestly could not afford to lose.
I opened accounts on every platform I could find: robo-advisors, peer-to-peer lending apps, crypto exchanges. I was not building a portfolio. I was constantly looking for “the best opportunity”.
Very quickly, that search turned into noise.
I bought into pyramid-like schemes, unproven crypto projects, and speculative positions I barely understood. All because they were hyped.
The problem was not access to information. It was the absence of a framework.
I could explain concepts like diversification, but I was not applying them. I was reacting, chasing trends, following confidence, and confusing visibility with credibility. Every new hype cycle pulled me in. Every confident YouTuber convinced me I was missing out.
Looking back, those early decisions were not isolated mistakes. They followed clear patterns. Patterns I only recognized much later.
The 4 Most Common Beginner Investing Mistakes (And Why They’re Expensive)
Falling for Quick Money Thinking
One of the biggest beginner investing mistakes I made was believing investing should produce fast results.
That belief made me vulnerable to hype, to confident-sounding strangers on YouTube, and to opportunities that promised extraordinary returns without explaining where those returns actually came from. I became interested in questionable crypto projects and schemes that, in retrospect, had far more in common with speculation than investing.
Projects like AI Marketing and PLCU crypto sounded innovative and financially life-changing. The reality was simpler: I did not understand what I was buying. I only saw momentum and the possibility of profit.
When you are new to investing, you often mistake YouTubers talking with confidence for credibility. Confidence is easy to manufacture. Track records are not.
The data on this is sobering. Research by Barber and Odean, published in the Journal of Finance, found that the average individual investor underperforms the market by 1.5% per year, and that active traders underperform by 6.5% annually. The culprit is not bad stock selection. It is the cost of acting on noise: buying what is popular, selling what is falling, and mistaking momentum for insight.1
DALBAR’s 2024 Quantitative Analysis of Investor Behavior confirms the same pattern: in 2023, the average equity investor earned 5.5% less than the S&P 500, not because markets were inaccessible, but because emotional decision-making drove them to sell during downturns and miss the subsequent rebounds.2
Key Takeaway
Most beginner investors are not simply making bad decisions. They are entering financial markets during an era where speculation is often more visible, more exciting, and more aggressively promoted than disciplined investing.
Investing Without a Plan
I was putting money into assets without defining what I was trying to achieve, how long I could stay invested, how much risk I could genuinely tolerate, or what would make me sell.
One week I wanted long-term wealth. The next I was chasing short-term gains. I sometimes invested because a trend was popular. Other times because prices looked cheap. Occasionally because I was simply afraid of missing out.
Without a plan, I had no filter. Every opportunity looked relevant, every opinion felt urgent, and every market movement seemed to demand my response.
That is not investing. That is emotional reaction wearing investing’s clothes.
Key Takeaway
Investing without a plan means every market movement becomes a decision point. Most of those decisions will be driven by emotion rather than logic. A plan is not about predicting markets. It is about deciding in advance what you will do when markets surprise you.
Not Understanding What I Owned
Before I invested in something, I rarely asked the questions that matter most: Why does this asset deserve to grow in the long term? Would I still feel confident holding it through a major downturn? Am I investing based on genuine conviction, or reacting to momentum?
Most of the time, I did not have honest answers.
Instead, I focused on entry points and price movements. I also ignored the practical details that quietly destroy returns over time: tax treatment on gains, transaction fees that compound against you, liquidity risk during market stress, and the overall risk concentration in my portfolio.
The consequence of not understanding what you own is predictable: you become emotionally dependent on other people’s opinions.
You panic faster.
You sell at the worst moments.
It was only later, when I started applying Shariah and ethical screening criteria — avoiding harmful industries and prioritising genuine economic activity — that I began asking better questions before putting money into anything. That process gave me something I had been missing: conviction in what I owned. Most investors, values-driven or not, would benefit from this kind of deliberate friction before committing capital.
The most underrated skill in investing is not stock-picking or market-timing.
It is clarity. Not prediction. Clarity.
Concentrated Positions: The Crypto Reality Check
Like many people entering financial markets for the first time, I became heavily exposed to crypto. Some of those experiences improved my understanding. Others taught me the hard way.
At the time, crypto felt like the most real and urgent financial opportunity available to someone in my position. Everywhere online, and increasingly in real-life conversations, people were talking about extraordinary returns and life-changing projects with unlimited upside.
I got caught up in that environment more than I should have.
I bought assets during periods of extreme excitement. I entered positions near market tops, driven by the collective confidence of people online who, it later became clear, often did not understand what they owned either.
Then markets crashed. Confidence disappeared. The same influencers who had been loudest during the rally went quiet. And suddenly, the only voice left was my own, asking why I had followed the crowd instead of thinking independently.
When prices were rising, I believed I understood investing.
When markets dropped, I realized I mostly understood excitement.
This pattern has a name in behavioral finance: the disposition effect — the documented tendency for investors to sell winning positions too early and hold losing ones too long, driven by emotion rather than evidence. Shefrin and Statman first identified it in the Journal of Finance in 1985, and decades of research since have confirmed it’s one of the most consistent and costly behaviors in retail investing.3
That experience taught me something crucial about diversification. It is not just about protecting your capital. It protects your psychology too. When too much of your portfolio depends on one asset, every price movement starts feeling personal. Concentrated positions create enormous emotional exposure.
A diversified portfolio gives you the psychological stability to stay invested during downturns. That stability is where long-term compounding actually happens.
Key Takeaway
The function of diversification most guides miss: it is not primarily about maximising returns. It is about keeping your decision-making rational when individual positions are moving violently. A diversified portfolio gives you the psychological stability to stay invested during downturns, which is where the long-term compounding actually happens.
Shifting From Speculation to Long-Term Investing
The turning point was not one dramatic event.
It was the accumulation of several painful realizations. Losing money. Watching markets crash positions I had built on excitement rather than understanding. Recognizing how emotional the majority of my decisions had actually been.
Those realizations forced me to confront a difficult truth: I was spending more time chasing opportunities than building an actual investment philosophy.
So I changed the question I was asking.
Instead of: “What investment can make me rich quickly?”
I started asking: “What strategy can I realistically sustain for the next 20 years?”
That question changed everything. It pushed me toward long-term investing — toward ETFs, diversification, dollar cost averaging, genuine risk management, and understanding the fundamentals behind what I owned.
The irony is that investing became calmer once I stopped trying to outsmart markets. The urgency disappeared. The anxiety reduced. The decisions became cleaner.
My Investing Philosophy Today
Today, I believe investing is less about predicting markets and more about managing behaviour.
Fear, greed, impatience, ego, and FOMO influence financial decisions far more than most investors want to admit. The academic literature on behavioural finance has known this for decades. Living it is harder than reading about it.
I no longer believe successful investing comes from chasing trends, finding the next big opportunity, or timing markets correctly. I have tried all of those things. The evidence against them, both in the research and in my own portfolio, is clear.
Instead, I believe long-term wealth is built through patience, consistency, diversification, and disciplined investing — repeated, without drama, over many years.
The investors who succeed long-term are not necessarily the smartest or most aggressive.
They are usually the most emotionally consistent.
Why Ethical and Halal Investing Became Important to Me
As my investing philosophy matured, I started thinking more carefully about where my money was actually going and what it was supporting in the real economy.
That question gradually changed how I invest. I began exploring ethical and halal investing principles, not as a restriction, but as a framework that prioritises transparency, real economic activity, and long-term responsibility.
For me, investing stopped being purely about maximising returns. It became about building wealth in a way that also aligned with my values. This shift is part of what inspired The Capital Edit, creating guidance for people like me navigating multiple financial realities at once.
5 Lessons That Changed How I Invest
01
If you cannot explain why an asset deserves to grow in plain language, you probably should not put significant money into it. Conviction requires understanding, not just confidence.
02
Diversification protects your psychology as much as your capital. A concentrated position does not just create financial risk, it creates emotional exposure that degrades your decision-making.
03
Emotional investing is usually more dangerous than market volatility itself. Markets recover. Poor decisions made during emotional states often lock in permanent losses.
04
Long-term thinking is a genuine competitive advantage. Most investors are optimising for the next week or month. Staying invested for decades, without interference, is rare and rewarded.
05
Consistency and discipline compound just like returns. The investor who invests the same amount every month for 20 years, without interruption, typically outperforms the investor who tries to time the market, not because of superior analysis, but because of superior behaviour. Vanguard’s research on ‘Advisor’s Alpha’ quantifies this: behavioral coaching — simply keeping investors from making emotional decisions — adds an estimated 1.5% in net returns annually, more than any single investment selection decision in their framework.4
What I Would Tell Beginner Investors Today
If I could give one piece of advice to someone starting out, it would be this: do not confuse excitement with understanding.
When I first started investing, I assumed successful investors always knew something other people did not — some insight, some edge, some information advantage. I spent years searching for that edge.
The reality is more humbling and more useful: investing is mostly about managing yourself. Your expectations. Your emotions. Your behaviour during uncertainty. Your ability to stay the course when everything feels wrong.
You do not need to predict every market movement. You need patience, self-awareness, and enough humility to keep learning after mistakes.
Most importantly, you need time. Because investing is rarely about becoming rich quickly. It is usually about building the ability to stay rational, disciplined, and consistent through uncertainty over long periods. That ability is worth more than any single investment decision.
Why I Created The Capital Edit
I created The Capital Edit because I could not find content that reflected the reality I was living.
Most financial content online assumes a single financial reality. It is heavily US-centric, assumes access to established financial systems, and rarely reflects the lived experience of building wealth across different currencies, constraints, and levels of access.
That gap is what I want The Capital Edit to address, through evidence-based insights, real investing experience, and a global perspective on wealth building. This is for people navigating multiple systems at once: international professionals, immigrants, and anyone building capital outside traditional financial infrastructure.
Final Thoughts
I did not start investing as an expert. I started as someone genuinely trying to understand how wealth works, and making expensive mistakes along the way.
Looking back, most of my early investing decisions were driven more by emotion than by understanding. Some of those decisions cost me money. More importantly, they reshaped how I think about investing permanently.
I still learn constantly. I still make mistakes. But my relationship with investing today is calmer, more intentional, and infinitely more grounded than when I first began. And that shift changed more than my portfolio. It changed how I think about money, freedom, and the future itself.
Most people fail at investing not from lack of intelligence, but from lack of foundations.
The good news: the foundations are learnable. And if you’re building a halal or ethical portfolio, the screening process becomes your clarity process.
The Halal & Ethical Investor Starter Kit
Everything this article couldn’t fit — in one free kit.
- How to screen any stock or ETF for Shariah and ESG compliance
- A ready-to-use 3-ETF halal portfolio with tickers and allocations (for European investors)
- A vetted broker shortlist for investors based in Europe
- A plain-English glossary of everything you’ll actually need
+ you’ll get the weekly Capital Edit newsletter — ethical investing insights for mobile professionals.
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Frequently Asked Questions
written by
Shayma Solli
Shayma Solli is the founder of The Capital Edit. She holds a Master’s degree in Business Management and has 8+ years of investing experience across EU, UK, and international markets. Her focus is on ethical, Shariah-compliant investing strategies for expat professionals.
Sources
- Barber, B.M. & Odean, T. (2000). Trading is hazardous to your wealth: The common stock investment performance of individual investors. Journal of Finance, 55, 773–806. ↩︎
- DALBAR (2024). Quantitative Analysis of Investor Behavior (QAIB). Boston: DALBAR, Inc. ↩︎
- Shefrin, H. & Statman, M. (1985). The disposition to sell winners too early and ride losers too long: Theory and evidence. Journal of Finance, 40, 777–790. ↩︎
- Vanguard (2020). Putting a value on your value: Quantifying Vanguard Adviser’s Alpha. Vanguard Research Brief, June 2020. ↩︎