Investing is not easy.
Even seasoned professionals stumble and make mistakes.
This post explores 7 common pain points – and concrete tactics on how to overcome them.
“Investing is simple, but not easy.” – Warren Buffett
This article was written by a Financial Horse Contributor.
1. Information Overload
24/7 news cycles, social media chatter, and contradictory analyst notes swamp you with noise.
Decision fatigue leads to paralysis or knee-jerk trades.
How to overcome
- Curate your feeds – Follow 3–5 high-signal sources and mute the rest.
- Use a checklist – Before every investment, tick off criteria (business quality, valuation range, thesis time-frame).
- One-page thesis rule – If you can’t summarise why you own a position in one page, you don’t know it well enough.
2. Emotional Roller-Coaster (Fear & Greed)
Market swings mess with your emotions, prompting buy-high/sell-low behaviour.
How to overcome
- Pre-commit with an Investment Policy Statement (IPS) – Lay out asset mix, rebalancing bands, and sell rules while calm.
- Automate contributions – Dollar-cost averaging (DCA) dulls volatility’s sting.
- Mindfulness cues – A 24-hour cooling-off period for any trade larger than X% of your portfolio.
3. FOMO & Market-Timing Temptation
“Get rich quick” narratives especially online are 99% false marketing targeted to sell you something.
Hearing about supposed “success stories” about traders, or windfall stories can tempt you to deviate outside of your usual risk appetite and make hasty decisions.
How to overcome
- Set trigger levels – Only buy when price hits pre-defined valuation zones.
- Use DCA tranches – Deploy cash in equal parts over weeks/months, removing guesswork.
- Track opportunity cost – Log hypothetical “FOMO” trades you didn’t take; most underperform your plan.
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4. Staying Patient During Flat or Down Years
Investing is a long game.
When in doubt, look at Warren Buffett.
However, it is difficult to stay patient during flat or down years.
Progress feels invisible annd doubt creeps in.
How to overcome
- Measure the right metric – Focus on % of goal funded or dividends received, not just price.
- Quarterly check-ins – Enough to stay informed, seldom enough to stay sane.
- Future-self letters – Write reminders of long-term objectives; read them when boredom bites.
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5. Assessing & Managing Risk
Risk management is a key pillar for investing.
There is no upside, if you cannot protect your downside.
However, risk management is tricky. Humans misjudge probabilities and ignore tail risks.
How to overcome
- Risk-profiling quiz + sleep test – Match allocation to both survey score and gut feel.
- Diversification buckets – Core (index funds), Satellite (thematic bets), Speculative (<5 %).
- Annual rebalance – Forces sell-high/buy-low discipline automatically.
6. Cognitive Biases (Overconfidence & Confirmation Bias)
Overconfidence and confirmation bias are one of the common cognitive biases of investors.
Winners feel like skill, while losers feel like bad luck.
How to overcome
- Investment journal – Record thesis, date, and expected catalysts; review quarterly.
- Red-team your ideas – Ask a friend or AI to build a bear case.
- Set humility guardrails – Cap single-stock exposure (e.g., <10 % of net worth).
7. Hidden Costs & Tax Drag
Investing returns can be eroded by hidden costs.
Fees compound against you and taxes slash net returns.
How to overcome
- Know the TER – Prefer index ETFs/unit trusts with expense ratios <0.30 %.
- Use tax-advantaged wrappers (SRS, CPF-SA top-ups etc.).
- Consolidate brokers – Reduce FX spreads and custody fees by keeping fewer accounts. (Best brokers in Singapore + promo codes here)
Closing Thoughts
Mastering investing isn’t about predicting markets, it’s about mastering yourself.
Build processes that remove emotion, automate good habits, and minimise friction.
Do that consistently, and the “hard parts” become merely background noise on your path to compounding wealth.