4. Buying high

The goal in investing is to sell a security at a higher price than what you paid for it. Still, people often do the opposite. Why? They're chasing last year's top performing stock or industry, betting that it will continue to outperform.

Steer clear of investment fads, and don't buy a stock merely because it's snagging the most headlines today. That strategy often causes investors to buy a security at its peak price.