In this instructional YouTube video, seasoned fund manager James Helliwell draws on over 15 years of personal investing experience to highlight five common mistakes that retail investors repeatedly make. He begins by warning against superficial diversification through overlapping ETFs, using a case study that compares a US‑focused S&P 500 ETF, a global MSCI World ETF, and a Vanguard LifeStrategy fund to show how geographic and sector exposures can remain heavily US‑centric despite the appearance of global coverage. He then examines the hidden cost of fees, illustrating how advisor charges, ETF expense ratios, trading commissions, FX and inactivity fees can erode tens of thousands of pounds over a typical 30‑year horizon, and recommends zero‑commission platforms and fee‑impact calculators. The third mistake concerns mismatching investments to one’s time horizon; he cites Paul Tudor Jones’s advice and Japan’s 40‑year rally‑then‑drawdown to stress the need for risk levels that align with investment length. Fourth, Helliwell stresses the importance of having clear investment goals and an appropriate account structure (tax‑efficient ISAs, flexibility for leverage or spread‑betting) before committing capital, arguing that without a plan investors may lock away funds or miss opportunistic buying. Finally, he discusses portfolio drift and the necessity of regular rebalancing, using his own portfolio of 16 equal‑weight stocks and the divergent performance of Novo Nordisk and Lam Research as a concrete example of buying low and selling high. Throughout, he blends personal anecdotes, numerical scenarios, and actionable recommendations, concluding with a call to view his other video on stock‑picking without fund fees.
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As someone who's been investing for over 15 years, it's fair to say that I've made my fair share of mistakes, but thankfully they didn't cost my job in the city as a fund manager or stop me from growing a 7-figure portfolio by my mid-30s. And in this video, I'm going to be sharing my 5 most commonly seen mistakes based on firsthand experience, not theory, so you can learn from these and become not only a better investor, but also stop losing time and money to trial and error. So without further ado, Let's get into it. Now, many investors think that they have a diversification issue, too much exposure to a particular country or particular stocks. So what they'll end up doing is add more ETFs thinking that they're spreading the risk, but that often adds to the problem rather than fixing it, and it usually goes unseen. So a client of mine came to me saying he was worried about the US and there being a bubble there, and he wanted less exposure to tech overall. And perhaps like many of you He'd been holding this Vanguard S&P 500 ETF alongside a few of the usual suspects in NVIDIA and Tesla and so on. So what he was looking to do was sell half of his S&P 500 position and put it into the global MSCI World ETF for better diversification. But what he hadn't realized is that by switching to this supposedly global ETF, it was in fact just adding back exposure to many of the same stocks. So here you can see the geographic breakdown for the MSCI World ETF, with the United States at the top at 72% of the fund's overall holdings. And when you begin to look into the top 10 holdings, this being the S&P and this being the NASDAQ, you can see how similar the holdings are. With the exception of JP Morgan and Berkshire Hathaway, which is not in the MSCI World's top 10, the holdings are basically identical. So people see this as some sort of dilemma in not knowing which funds to add in order to diversify the portfolio, when really it's of their own creation in sticking to ETFs rather than building a portfolio of single stocks. But if you are going to use them, then here's one fund that I'd buy to be truly diversified in just one click. These essentially provide ready-made portfolios splitting your risk from, let's say, 20% equity, 80% bonds, all the way up to 100% equity. Now when you look at the breakdown, you can see that basically they hold 4 different subindexes that you could otherwise buy individually. To get this split, 60/40 or whatever the flavor is. Only 35% of the Vanguard fund is in US stocks compared to the MSCI World's 71%, as we've just seen. So that's less than half, and therefore is offering, on paper, far better diversification if you're worried about concentration risk in the US. Now when you come to the sectors, it's the same kind of story, and you can see that tech is only 15% in the Vanguard LifeStrategy Fund, whereas tech in the MSCI World is nearly double that, 30%. So if you're worried about US and US tech risk, then the MSCI World is not the one, considering that there's a 1/3 weighting to this particular fund. When you look at the top 5 holdings, which of course are identical, the the 5 biggest companies in the world are going to be the same for each fund. What you're really doing is multiplying these weights here by that factor, so it's 1/3 less. So in the case of Alfa— Apple, rather than it being 6%, you're timesing that by this weight and it comes in at more like 2%. Now if you compare that to the weighting in the MSCI World Index ETF, it's close to 5%. So you've got 2.5 times the concentration risk investing in the MSCI World ETF, which is all over the internet and YouTube about being the way to diversify globally and get away from US stock risk. And it's complete nonsense compared to just the first option I pulled here. Now of course this isn't advice, but I'm just showing you as somebody who genuinely lives and breathes this stuff how so much of YouTube's got it wrong and how ultimately if you're watching that content, it's not really going to help you. And hence so many people remain stuck. The fee for this is 0.22%. For reference, the MSCI World ETF is 0.24%. The performance here compared to the benchmark for the Vanguard fund is actually slightly better than its peer group, so you're getting even better value for money there compared to the MSCI World, which lags behind that same fund. So these funds might be the answer for people who don't want to try and beat the market by picking stocks But what if I showed you a simple way that you could potentially save yourself tens of thousands more in fees at the same time as getting this diversification? And to do this, I'm gonna refer you to my trusty calculator. It's based on some assumptions by Legal General, so you can customize this to put in your own amounts, but we'll assume that you're starting with the average investment for a 30-year-old of £40,000 and you're contributing £500 a month. Over a 37-year horizon through to retirement at the historical rate of return and inflation, going via an advisor could potentially see you rack up over £220,000 in fees. But even with the index ETF, there's still those fund fees, even at 0.22% per year, that add up, and they could add up to over £30,000, £33,500. Now, if you are investing more, let's say you've got £100,000 and maybe you're adding £1,000 a month, we're talking potentially hundreds of thousands of pounds in fees. Even a seemingly small charge can add up over the years with ETFs or these life strategy index funds, for example. So let me show you how to keep these to a minimum without changing your investment strategy, which smaller investors are very often forced to do when it comes to commissions. I'll use Hargreaves Lansdown as an example here because I had all my accounts with them for some time before zero commission share dealing came along. So let's say that you buy and sell a couple of shares each month. So that's 4 trades when you consider the commission to get in and get out. Now Hargreaves charge as much as £11.95 per trade, and that's before stamp duty and any currency conversion fees, which they also clobber you for. Now, 4 trades a month at £12 comes to nearly £50. So if you take that and multiply it over 12 months, you're looking at £600 roughly a year. If you eliminated those commissions using a zero-commission platform and you instead invested that £600 a year over 30 years, that would add £165,000 to your retirement account over that 30-year period. And that's assuming the, again, historical return of about 8% after inflation. So take a look at zero-commission share dealing platforms. The only thing to still be aware of are things like FX charges, which if you're buying shares overseas you're possibly going to incur, and also inactivity fees, which if your broker charges them, take your business elsewhere. Because I think it's one of the most contradictory things for an industry that's regulated regulated, where you've got to toe the line and say everything else, encouraging them to trade or invest when they wouldn't otherwise make changes. But none of this is going to help you if you get this next bit wrong, and it's how you could still end up losing money even when you bought the right thing. Now, the mistake I see here is that most people invest without matching money to time. In the words of Paul Tudor Jones, one of the best traders of all time, he put it like this. He said that your trade's time horizon must match your idea's time horizon. And what he means by this is that it's no good buying something that might be risky if you plan on retiring or might otherwise need the money inside of, say, the next 5 years, or vice versa, playing it too safe, perhaps worrying about an imminent correction or recession. If you're investing for the long run, you can afford to take more risk. So the thing to remember is that whilst time can smooth risk, it doesn't eliminate it. Japan is a case in point. For more than 40 years, it led pretty much every global market, including the US. And when you consider the returns, it in fact 10x'd the USA. So after a 40-year rally that drew everybody in, it took 34 years to recover from the 1989 peak. So 35 years is an investing lifetime for most people, and that's the real point of this example here. It isn't about predicting markets and trying to time them. It's about having a plan and ensuring that your investments match that time horizon. And if you can afford to be patient, then be patient. So to recap, we've looked at how portfolio overlap, fees, and not matching your investments to your time horizon can all get in the way of you getting the outcome you want. But none of that will stick if you're not really sure about what you're investing for in the first place, and that's the mistake most people make. They invest with no clear reason. They've just heard that investing is good from a friend, so they might go and set up an ISA, maybe pick some funds, some ETFs, and just hope that it works out. But without a goal, you cannot build a clear strategy, whether it's how long you will invest for, which account you're going to use from a tax perspective, and how much risk you're going to take. And by not knowing what you're aiming for, you could essentially be leaving thousands on the table with inefficiency, or thousands locked away out of arm's reach when you really need it. If you start with an investment first, you could end up with these random accounts all over the place that might not even suit your situation. Flexibility has value. In a recession, what happens is that stocks fall and rates are usually cut. Stimulate. So in other words, at the time that things go on sale— prime buying opportunities for us as investors— the cost of borrowing also drops. So by that we mean the ability to use leverage if we wanted to do so. So we've got bargains and cheap leverage. What could go wrong? It's a bull market, it's good things. That flexibility creates opportunity. So like I say, whether it's moving money between accounts, taking advantage of cheap leverage, or using instruments like spread bets, which also happen to be tax-exempt, you don't have access to those if you haven't set things up with foresight. So again, having a plan before you get started not only helps you know what to buy, but it also ensures flexibility to take advantage of opportunities for better returns and lower taxes. Now the final mistake is the one that creeps up over time. So when you start investing, you might put together a nicely balanced portfolio. It all looks perfect on paper. Maybe you've put 80% in growth assets, 20% in safety because you've been watching my videos and you've followed the rules. But then a year goes by and one fund will perform better than the other, or one stock performs better than the next, and suddenly that 80% is now more like 90%. So your risk level has changed even though you haven't touched the thing, and that is the key point. Now, fix for this is actually simple— you rebalance. So let me show you how this played out recently in my own portfolio so that you can know how to fix it without getting yourself into a mess. So I was running a portfolio of about 16 positions and I weight each of them equally. So that means 16 or 100% divided by 16, I believe we're running at 6.25%. As time went by, this is Novo Nordisk. And this is Lam Research, ticker LRCX. What happened is that Novo Nordisk had been on a tear and was at the time the best performing stock in my portfolio, so it grew— it had grown to the largest weight in there. And at the same time, Lam Research, as well as some other stocks in there, had been lagging. So that was happening, they were diverging. And this happened again in the opposite direction just earlier this year. Lam Research be my top-performing stock in 2025. It was up over 150%. And unfortunately, in a reversal of fortune, Novo Nordisk, one of the worst-performing names in my portfolio. I think it was down about 30 or 40%. If something's grown too large, then you just trim it. If something's fallen but your thesis still holds, as is the case with Novo Nordisk, then you just top it up. And in essence, what you're doing here is buying low and selling high. Which sounds like a winning investment strategy. So when you step back and look at everything we've covered, from overlap, fees, time horizon, and balancing your portfolio periodically, a pattern starts to emerge. People don't usually lose money because they pick the wrong investment. They lose money because they don't know how to manage the portfolio around it. So now that you know how to do that, check out this video where I explain exactly what to look for when it comes to picking stocks that have the potential to not only beat the market and compound your wealth faster than ETFs, but to do so without any fund fees. It's bloody great.
