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This Mistake Could Cost Investors in 2025

Hey friends,

We’ve been through a wild few years in the market. From the COVID crash to the AI boom, crypto winters to record highs in the S&P 500. And now, in 2025, we’re seeing a lot of excitement again. But here’s something I want to talk about that’s been keeping me up at night: a mistake I see many investors making right now.

And if we’re not careful, this mistake could cost a lot of us big time.

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What’s the Big Mistake?

The mistake I’m talking about is chasing performance.

It sounds harmless. Everyone wants to buy winners, right? But here’s the problem — when we only look at what’s going up right now and rush in blindly, we’re setting ourselves up for disappointment.

This isn’t just about hype stocks. It’s also about trending sectors, hot ETFs, and anything that’s recently made headlines.

Why? Because history shows that what goes up fast… often comes down just as fast.

Let Me Share a Story

I remember back in 2020 and 2021, many investors — including friends of mine — were throwing money at stocks like Zoom, Peloton, and ARKK ETF. These were skyrocketing. People felt like geniuses.

But fast forward just one year later — many of those names crashed 70%, 80%, even 90%. Those who bought at the top got crushed. Why? Because they chased.

And we’re seeing similar patterns now, just with different names.

Chasing in 2025 Looks Like This

• Buying Nvidia, Tesla, or Meta just because they’ve already doubled or tripled

• Pouring money into AI or semiconductor ETFs without checking fundamentals

• Getting FOMO from your friend’s gains and trying to “catch up”

I get it. It’s tempting.

But this behavior often leads to poor timing — buying high and selling low.

What You Should Do Instead

Let’s flip the script.

1. Invest with a plan – Know why you’re buying something. Is it because of strong earnings? Reasonable valuation? A long-term trend?

2. Diversify smartly – Don’t throw everything into the hottest theme. Spread out your risk.

3. Take profits when needed – If something’s gone up 100%, consider trimming. It’s okay to lock in gains.

4. Be patient – Great companies don’t need to be chased. You can wait for a better entry.

5. Rebalance your portfolio – Review your allocation regularly. Trim what’s overheated, add to what’s undervalued.

This isn’t just theory — it’s what I’m doing with my own money.

The Psychology Behind Chasing

Let’s be real. We chase because of fear. The fear of missing out.

You see the headlines: “This stock just hit another all-time high!” You hear your colleague say, “I made 60% in two months!” And suddenly, you feel behind.

But investing isn’t a race. It’s a marathon. And chasing only puts you in a dangerous spot.

Instead, remind yourself: the best investors stay calm. They buy when others are fearful. They avoid the herd.

How to Spot a Potential Trap

Here are a few red flags that scream "chase":

• The stock is up 100% in 3 months with no major change in fundamentals

• Everyone is talking about it, even people who never invest

• Analysts are suddenly upgrading the stock after it’s already soared

• It’s hitting headlines constantly, but earnings haven’t caught up

If this sounds familiar, slow down. Breathe. Research.

It’s Not Just Stocks

Chasing doesn’t only happen in stocks.

• Crypto: We’ve all seen coins explode, then collapse.

• Real estate: Remember when people rushed into flipping homes in 2021?

• Commodities: Gold, oil, and even uranium have hype cycles.

The same principle applies — if something’s already surged, ask yourself if the fundamentals justify it.

My Strategy for 2025

I’ll be honest with you. I’m more cautious this year.

I’m not going all-in on anything hot. Instead, I’m:

• Holding quality dividend stocks

• Watching small-cap value for hidden gems

• Keeping a little cash on hand for dips

• Focusing on long-term trends like clean energy and infrastructure

I’d rather make 8–10% consistently than chase 100% and lose 50%.

Examples of Smart Moves Right Now

Instead of buying Nvidia at all-time highs, maybe consider:

• Older tech companies still growing steadily, but trading at fair value

• REITs with strong balance sheets and rising dividends

• Financials that benefit from higher interest rates

Or maybe international stocks — some emerging markets are cheap right now.

You don’t have to follow the crowd.

What History Teaches Us

Every cycle has a theme.

Dot-com boom? Everyone chased internet stocks. Crypto boom? Everyone chased coins with dog logos. AI boom? Now we’re chasing chips and cloud.

But every cycle also ends with pain — for those who bought late.

Smart investors study history. They avoid repeating mistakes. They buy value, not hype.

Key Takeaways

If you remember just one thing from this piece, let it be this:

Don’t chase. Choose.

Choose your investments based on logic, not emotion. Choose a strategy that works for you, not what’s trending. Choose to invest with patience, not panic.

Because in the end, it’s not about how fast you grow your money — it’s about keeping it when others lose theirs.

Final Takeaways

The biggest mistake in 2025 won’t be missing out on some hot stock.

It will be chasing it at the top and getting crushed when it comes back down.

Let’s be better than that. Let’s be smart, thoughtful investors who focus on the long game.

Stay grounded. Stay informed. And most of all — stay in control of your decisions.

Until next time,

Your friend in finance

[Live Life Grow Wealth]

DISCLAIMER

I make no representations, warranties, or guarantees, whether expressed or implied, that the content provided is accurate, complete, or up-to-date. Past performance is not indicative nor a guarantee of future returns.

I am an individual content creator and not regulated or licensed by the Monetary Authority of Singapore (MAS) as I do not provide investment services.

All forms of investments carry risks, including the risk of losing your entire invested amount. Such activities may not be suitable for everyone. You are strongly encouraged to seek advice from a professional financial advisor if you have any doubts or concerns.