Warren Buffett once said the first rule of investing is not to lose money, and the second rule is to remember the first.
This means that learning to invest wisely is as much about avoiding the wrong decisions as it is about making the right ones. As they say, it takes less effort to tear a house down than to build it.
In what follows, we consider 6 investment mistakes you should avoid as a beginner learning how to invest money in the UAE.
Putting all your eggs in one basket
You may have heard that one asset produced incredible returns in 2025, and you are ready to put all your money on it in 2026.
The stock market does not work that way.
Certain company-specific, industry-related, or macroeconomic factors can cause that same company to have a poor 2026. What then happens to your money if the company experiences a poor or average year?
The best way to minimize your risk exposure is to invest in multiple assets across asset classes, industries, market cap, and even geography.
By diversifying your portfolio in this way, you can be sure that a single company’s bad year will not throw you off balance.
Investing based on emotions
Many people enter the market because they have heard that a stock is performing well. And once the stock starts facing some troubles, they exit.
This is why the average man tends to buy high and sell low, as Ray Dalio puts it. They buy high because they enter the market when the stock has already become popular and exit when the stock is facing headwinds.
The antidote to the fear-and-greed cycle is to buy quality stocks (and other assets) and hold them for the long term.
Timing the market
Many investors try to enter the market when it has dipped, hoping to catch the wave to the upside and sell when it peaks.
In reality, it is hard to time the market. An asset can keep falling (rising) even when you believe it has bottomed out (peaked). Market timing can make you lose out on the market’s best days even as you suffer its worst days.
Experts have advised that spending time in the market (through long-term investing) is a better strategy than market timing.
Investing without a clear plan
All the other mistakes are easier to make when you approach investing without a clear plan.
A clear plan should outline your investment goals, time horizon, risk tolerance, and your investment approach (passive or active, for example).
Also, it should include how much you are investing every month and how you are constructing your investment portfolio.
Chasing fads
There will always be a new shiny object that people are gravitating towards. They will promise low risk and very high returns most of the time.
However, as a beginner, you are better off sticking to time-tested assets like stocks, bonds, ETFs, mutual funds, index funds, and real estate investment trusts (REITs). Remember, the first rule is to avoid losing money.
Using the wrong investment platform
The investment platform you use also matters. Choosing an investment platform with high fees, poor support, a shabby user interface (UI) and user experience (UX), and inadequate educational resources can make your investment journey more difficult.
Instead, focus on an investment platform that makes your investment seamless with the right support tools at every step of the journey.
If you are in the UAE, Sarwa is such a platform. With them, you can purchase different time-tested assets and explore various investment strategies (active and passive).
You will also enjoy low fees, free deposits and withdrawals when you use bank transfers, a secure platform, an easy-to-use platform, and 24/7 support.
