The Investment Masterclass · Lesson 6 of 19
Lesson 6 of the Investment Masterclass: the two most common, most expensive beginner mistakes, told through one investor’s bad year, and the simple trick that avoids both.
Last verified: July 2026
Key takeaways
- The two most expensive beginner mistakes are self-inflicted: switching strategies mid-storm and needing the money too early.
- Switching to a defensive strategy in the middle of a crisis means selling low, locking in losses, missing the recovery, and paying stress and costs on top. You lose on all fronts.
- When a 30-year strategy meets a 2-year reality, you become a forced seller, often at the worst possible moment.
- The trick that avoids both: know thyself, pick a strategy you can stick to, and actually stick to it.
There are three important things to know about building a portfolio. The first was the squirrel mindset: protect yourself against big losses. For the second, let us introduce you to an investor we will call Mathieu, and the two ways he manages to lose money without the market being at fault.
Mistake 1: switching strategies in the middle of the storm
Mathieu picks an aggressive strategy while markets are calm. Then a crisis hits, the kind the world saw in 2008, and his portfolio drops hard. Sleepless, he switches to a conservative strategy in the middle of the crash. Which means: he sells his risky assets at the bottom, locks in the losses, and sits in the defensive seat while the market recovers without him.
In the end, he would have been better off either sticking with the aggressive strategy, or going defensive from the very beginning. Switching cost him twice: he had full exposure on the way down and little on the way up. Add the anxiety, the sleepless nights and the transaction costs of every switch, and you lose on all fronts.
Mistake 2: needing the money too early
Second scenario. Mathieu picks a sound strategy built for a 30-year horizon, because he is investing for retirement. Two years in, life happens. He needs the money. Now. His 30-year strategy has just become a 2-week strategy: he is a forced seller, possibly at the worst moment, with full exposure to the downturn he sells into and none to the recovery that follows.
There is nothing wrong with short-horizon strategies as such. There are appropriate strategies for trading on short timeframes. But you never want to be forced into one by surprise. Being forced to liquidate at an unplanned moment is a recipe for financial disaster.
The trick that avoids both mistakes
Both mistakes share a root: a mismatch between the strategy and the person holding it. So the protection is one and the same:
| The mistake | What it costs | The protection |
|---|---|---|
| Switching mid-storm | Selling low in panic, locked-in losses, missed recovery, stress and fees on top | Choose a risk level you can hold through a storm, before the storm |
| Needing money too early | A forced sale at the worst possible moment | Match the strategy to your true time horizon, honestly assessed |
1. Know thyself. 2. Pick a strategy you can stick to. 3. Actually stick to it.
It is rarely the markets that beat us. More often than not, we are our own worst enemies, and investing is a marathon you run against yourself. As Lesson 1 put it: successful investing is less about big wins, and more about consistently avoiding mistakes. The full curriculum lives on the masterclass hub.
Frequently asked questions
What is the most common beginner investing mistake?
Switching strategies too often. Every switch tends to book losses, add transaction costs and pile on stress. Investors who frequently change course usually sell low and buy calm, the exact opposite of the plan.
Should I change my investment strategy during a market crash?
Usually not. Switching to a defensive strategy mid-crisis means selling at the bottom and missing the recovery. The moment to set your risk level is before the storm. If a crash reveals your strategy was wrong for you, adjust deliberately once markets and nerves are calm, not in panic.
What happens if I need my invested money earlier than planned?
You become a forced seller, possibly at the worst moment, with losses locked in and no exposure to the recovery. That is why an honest time horizon, set before investing, is one of the strongest protections there is.
How do I pick an investment strategy I can stick to?
Know yourself first: your goals, your horizon and how much loss you can watch without panicking. Then choose the risk level that will never trigger you into panic mode. The strategy you can hold beats the brilliant one you abandon.
Next lesson: the third principle, your own primal brain, and how to stop it from sabotaging your portfolio. And if you want a professional to help you set a strategy you can actually hold, Alpian’s wealth advisory starts at CHF 2’000 at a FINMA-licensed Swiss bank.
This is Lesson 6 of 19
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