Devoted to understanding the basics and fundamentals of investing

This is the first entry in the 2008 investment knowledge series. Today I want to look at ten investing mistakes that all investors should avoid in 2008. Every investor has made at least some of these mistakes at some point, but the true test is whether you learn from your investment mistakes. Use this list of ten mistakes to avoid to remind you that your investment portfolio will be much more successful if you stay away from common investing mistakes.

1. Never simply buy a stock because someone on television or any other professional tells you to- This is a recipe for disaster, and quite frankly those who blindly buy stocks that the talking heads recommend deserve to do poorly.
2. Trading too frequently- This is an extremely common mistake that seems very easy to avoid, but for many investors isn't. The costs of trading too frequently can really eat up the gains from an investment portfolio.
3. Make an investment decision based on fear- Fear is what absolutely kills many individual investors. No one says it better than Warren Buffett "Be greedy when others are fearful, and fearful when others are greedy." The most money is often made when no thinks there is money to be made.
4. Failure to diversify- Failure to diversify in your investment portfolio is another quick recipe for disaster. A highly concentrated portfolio is great when things are going well, but can crush a portfolio in a hurry.
5. Failure to take advantage of a Roth IRA or 401k plan- If there is one thing that all investors should understand it is that a retirement plan is worth every penny you put into it. You can't go wrong investing in these.
6. Dabbling in penny stocks- Penny stocks are penny stocks for a reason, and I see no reason for an individual investor to be dabbling in these instruments.
7. Failure to take a long-term time horizon in your investment decisions- Tracking a portfolio's performance over the short-term too closely causes rash decisions which lead to an investor losing money.
8. Not doing enough research on potential stock picks- There is simply no reason that any investor should say they don't have enough information at their fingertips now. This is the information age and the web has a plethora of tools available to research stocks.
9. Timing the market- Investors have been trying to time the market for years, and a large number of them have been hurt badly. You'd be best to avoid it.
10. Becoming too emotional about the stock market- An investor should never get too high about their latest great stock pick or too low about their most recent dog. Emotions must be kept in check to succeed.