3 All Common Investment Errors | The Motley Fool Canada

Whether you are new to investing, there are a number of mistakes you have probably already been warned about. Buy low and sell high, meet the banker before investing, diversifying, doing your own research.

All of these warnings are certainly the ones to take into account, but there are other common mistakes that almost all investors are switched to. [19659003] Mistake 1: Niche Markets

Let's face it: many of us tend to invest because it is a new and exciting industry that is just about to be exploited. Take the cannabis industry today. Shares of cannabis businesses skyrocketed last year as investors climbed to get on the marijuana train before leaving the station.

Well, that train has certainly left the station recently, with many big companies seeing share prices cut in half as investors now watch out for a recession. Frankly, they are also impatient, with many marijuana companies not making profits as soon as investors had hoped.

Now, I'm not saying you shouldn't buy anything in a niche market. Aurora Cannabis Inc. (TSX: ACB) (NYSE: ACB) is a great way to get into cannabis right now.

The stock is sold at a low price, but is set to be the largest cannabis manufacturer in the world with potentially 700,000 kilos by the end of next year. It's already set up in 25 countries, including Canada, and is well on its way to reaching a $ 1[ads1]-per-gram price per sale when production is complete.

So while you can buy into niche markets, one mistake would be to buy up a bunch of companies in this industry and expect them all to rise. Instead, do your research and focus on a few.

Error 2: No Plan

You need a goal. The number one priority is investment. Without goals, your investment will be everywhere and nothing to show for it in the long run.

Apart from the obvious goal of making money, what do you invest for? Paying off debt? Buying a car? To retire? Think about this and then talk to your banker about what number you want now and how long.

If you have the time, it can be a great place to put money into considering a steady, low risk. An exchange-traded fund such as BMO Low-Volatility Canadian Equity ETF (TSX: ZLB) is a great alternative as the company is managed by analysts looking for low risk equity stocks. [19659002] That means that while you don't want to see a big jump that you would do with, say, Aurora, you will see a steady upward path for your money if you invest in the next decade.

Error 3: Look at the markets also close

That is the nature of the animal. Markets are going up and down. Every day, something can happen that sends shares to a tail spin, causing investors to panic. Take Shopify Inc. (TSX: SHOP) (NYSE: SHOP) for example. It can be said on both sides of this stock that investors let panic get the better of them.

As the stock climbed higher, investors panicked that they would miss out. Now, the stock is falling as investors worry about the future of the tech industry, leading to investor panic again and huge sales.

But again, you need to research your companies and decide if they are long-term or non-term buyers. Sure, you want to buy low and sell high, but if you wait a long time, you're almost guaranteed to sell high no matter what.

It is far better to wait for a storm like a recession and sell high for a few decades. Shopify is set to be such a stock that can still see significant returns for the long-term investor.

Its recurring revenues, fulfillment centers and major customers are just a few areas where the company has proven its strength. So stop looking at the stock price so carefully! It all comes out in the sink.

Fool contributor Amy Legate-Wolfe owns shares in Aurora Cannabis and Shopify. Tom Gardner owns shares in Shopify. Motley Fool owns shares in Shopify and Shopify. Shopify is a recommendation from Stock Advisor Canada.