In the world of investing, making the right decisions can make all the difference when it comes to accumulating wealth. However, with ongoing macroeconomic uncertainty and fears of a looming recession, it can be challenging to navigate the market effectively. Nicolo Bragazza, an associate portfolio manager at Morningstar Investment Management, has identified three key investing mistakes that individuals should avoid.

The first mistake Bragazza highlights is the common practice of trying to predict the market. Many investors spend significant time and energy forecasting market movements based on factors such as inflation levels and interest rates. Bragazza advises investors to instead focus on creating a diversified portfolio that can withstand market forces. By exploring different sectors and asset classes, investors can construct a well-balanced and defensive portfolio.

Another mistake Bragazza warns against is not paying attention to valuations. Investors often flock to trendy sectors like Big Tech stocks without considering whether they are overvalued. Bragazza points out that the recent tech sell-off has highlighted the sensitivity of these stocks to changes in market sentiment. By avoiding overvalued sectors and stocks, investors can protect themselves from potential losses.

Lastly, Bragazza cautions against placing too much emphasis on politics when making investment decisions. While elections can create short-term volatility in the market, Bragazza suggests that investors focus on fundamentals such as the structure of the economy and key sectors that have historically performed well. By following a long-term investment strategy based on strong fundamentals, investors can increase their chances of success.

Overall, Bragazza’s advice serves as a valuable reminder for investors to focus on creating a diversified portfolio, paying attention to valuations, and prioritizing fundamentals over short-term political events. By avoiding these common investing mistakes, individuals can position themselves for long-term financial success in a volatile market.