It's been a busy few years for investment markets, with the price of gold and cryptocurrencies surging then falling, as well as the increasing dominance of a small number of highly valued tech stocks.

While many investors have done well recently, experts warn some people are short-changing themselves through their own behaviour,

CMC Markets has released a new report outlining some of the mistakes it thinks investors are making.

Loss aversion

Many investors are caught out by loss aversion. People often feel the impact of a loss much more than they do a gain of a similar size.

Kurt Mayell, head of CMC Markets in Australia and New Zealand, said traders sometimes struggled because they held on to losing positions longer than they intended to for this reason.

Sometimes, investors sell profitable investments early to lock in the gains.

Jimmy Pan, head of retail trading for CMC, said he saw people holding on to losing trades longer than winning ones.

"I like to relate it to property investment. Most people when you speak to them about property they often say 'oh yeah I'm glad I held on to my property' or they'll often say 'I wish I bought a lot earlier because in time it appreciated'. But often when we see people talk about opportunities they're like 'oh I sold too soon. I let go of it too soon'. It's that letting go too early or holding on to something that's not working too long."

Overconfidence

Having some success can make investors more likely to decide they are on to something.

CMC said this was sometimes driven by the belief that recent success showed skill rather than the result favourable market conditions.

It said this was evident during the 2025 crypto rally when bitcoin prices hit US$126,080.

"As prices climbed, traders continued to add exposure at increasingly elevated levels, reinforcing the trend. This left the market more vulnerable to shifts in sentiment."

Bitcoin has drifted significantly lower through this year.

Herd mentality

Social media and news reports can also encourage some investment decisions. CMC pointed to the hype around GameStop.

Pan said he had seen people getting involved in things at the point when prices had already picked up significantly.

"A more recent example would be if you look at what happened in South Korea, their exchange went absolutely bonkers with Samsung and SK Hynix, pretty much two stocks lifting the entire index.

"A lot of people jumped on but didn't put that much money in until it really started to accelerate at the end. That's when a lot of people went 'I'm going to go all in … often seeing other people around them making money so they will be more inclined to stay on. It's one of those situations where euphoric-type behaviours take over instead of having a rational mind thinking maybe let's pare back some of our position."

He said social media influencers could produce compelling stories about why people should invest in a particular stock or theme.

"If it makes sense to a particular person they're like 'ok cool that makes sense I'll invest in that'. Whereas I think if you go back to a lot of the more traditional investment managers or stock pickers they're really delving into the business they're doing some proper due diligence research looking at the management, looking at the balance sheet, looking at cash flow all that sort of stuff to ensure they're putting money into something that's robust, that's going to stay around… people are more willing to outsource all their due diligence someone elsewhere it be a friend or something on social media."

Recency bias

Recency bias refers to the tendency to let recent wins or losses disproportionately affect decision-making. CMC said it could mean that investors adjusted their strategies too frequently or overreacted to short-term volatility, assuming that recent performance would continue.

Pan said he had noticed that people had started talking in shorter timeframes.

"I started my career in finance around the GFC. I remember I talked to investors at the time where long-term meant 10 to 15 years, when you buy and hold. I feel like now when you speak to a trader that may have started in that Covid period, within the last five or six years, long-term is probably a year or so."

He said people who had decided they would not be able to buy a property were shifting to faster-paced investments that were more liquid.

FOMO

Decisions driven by a fear of missing out could often do with more thought.

CMC said FOMO could lead people to prioritise participation over their normal investment processes.

Being human

Kernel founder Dean Anderson said controlling emotions was the biggest factor in successful investing - but it was hard to do.

"The reports data shows the average investor consistently underperforms the index. Barber and Odean's research found much the same for individual investors trading too often. And it's not just retail money either, most professionally managed active funds underperform their benchmark over time too.

"That's not an argument against owning direct stocks. The point is that more information, easier access, cheaper access, faster access, these are all marketed as benefits to the customer. They're not. They've been benefits to the platforms and exchanges, because those features drive an emotional response. They get us reacting more, trading more, and that reaction is what generates fees.

"For anyone who wants to hold some direct assets alongside a core of index funds, the answer isn't more information or more tools. It's the opposite. Focus on the long term, ignore the noise, and if you're investing regularly, automate it. A regular investment plan takes the emotion out of the decision entirely.

"Everything else is noise. And noise doesn't help you control the one thing that actually matters: your own behaviour."