2. Failing to diversify investments

It's riskier to invest in individual stocks than a mutual fund that holds a variety of companies. Investors should maintain a broadly diversified portfolio with different asset classes and investment styles. Putting too much money in a single industry or fund type leaves you vulnerable to price drops in those areas.

It's also important to make sure you're not investing in too many kinds of products. A financial adviser can help you find the right balance.