The seven deadly sins of investing

In its broadest sense, sloth is laziness or avoidance of effort. It’s not just physical idleness but also neglecting responsibilities or failing to act when action is needed.

Examples of slothful investor behaviour include not optimising their tax, doing poor research, not paying attention to costs and fees, ignoring their retirement or pension, and failing to invest early.

But investing early can make a huge difference. As Figure 1 shows, for an investor who is 65 today, starting to invest £250 per month at different ages can have a huge impact.

To avoid this pitfall, investors shouldn’t delay. It’s important to start investing early.

Wrath is intense anger or rage that leads to destructive behaviour. It’s uncontrolled emotion that often results in harm to others or oneself.

When investing, this can translate into waiting for the next crash before investing, impulsive investments due to anger, blaming others for one’s own investing mistakes, doubling down on a loss and emotional selling during downturns.

There is always a reason to worry (see Figure 2), and selling during downturns can drastically reduce returns. In each stock market crisis since 1988, the market has fallen by 30 per cent; but in the 12 months after each crisis, it has risen by 39 per cent. As a result, £10,000 fully invested in stocks since 1988 would have grown to £616,005 today. But just missing the ten best days would have cut that to £272,539.

To avoid being sent to the sin bin, investors should stay invested through the turmoil.

Pride is an inflated sense of self-worth or arrogance. Imagining oneself to be superior to others often leads to poor judgment or refusal to accept help when you need it.

Investors who show pride may ignore professional advice, refuse to admit their mistakes, be overconfident, brag about winners, and believe they can beat the market.

But markets can be hard to understand, and it’s easy to make mistakes. For example, an investor who thinks cash is king could lose out due to inflation. After 15 years at three per cent inflation, a £100,000 pot saved in cash alone would only be worth £64,116.

As shown in Figure 3, the annual return of global equities since 2010 was 11.7 per cent without inflation, and 8.6 per cent with inflation. Meanwhile, cash returns over the same period were just 1.4 per cent without inflation, and minus 1.5 per cent with inflation.

The moral of this story is that investors should take advice from professionals.

Broadly speaking, greed is an excessive desire for wealth, possessions, or power. It’s about wanting more than you need, often at the expense of others.

In investments, this can translate into investing in high-risk assets, chasing unrealistic returns, investing too late, borrowing to make more money, and putting all your eggs in one basket.

But market returns can be volatile, and that can cost investors who invest too late or to put all their eggs into one basket. For example, the price of silver went up by 304 per cent between January 2025 and January 2026, but it then fell by 150 per cent in just a few weeks in February 2026. If an investor had been greedy and invested heavily in silver in early 2026, they would have lost a lot of money.

Diversification is often called the only free lunch in investing for a reason. A Figure 4 shows, various assets perform differently in changing markets, and allocating to a portion of each is a robust way to reduce the risk of losing out (though the risk is never zero).

Figure 4: Asset performance, 2009 to 2025 (annual return, per cent)

Past performance is not a reliable indicator of future returns.

Source: Aviva Investors, Bloomberg. Data as of December 31, 2025.

Rather than be greedy for something that’s too good to be true, investors shouldn’t put all their eggs in one basket.

Envy is a feeling of resentment toward others because of their possessions, success, or qualities. It’s wanting what someone else has and feeling bitterness.

In investing, it’s what happens when investors compare the performance of their portfolio to others. It can turn into “fear of missing out” (FOMO) investing, chasing performance, focusing on what’s working now and forgetting about the long-term plan.

But advisers know the risk of chasing the market and investing in just the top-performing stocks. Even looking at a medium time horizon, the next ten years will probably look very different from the last ten years (see Figure 5).

Figure 5: Top ten US stocks in 1980, 1990, 2000, 2010, 2020 and 2025

The companies mentioned are for illustrative purposes only, not intended to be an investment recommendation.

Source: Aviva Investors, Aladdin, Bloomberg. Data as of December 31, 2025.

Take the ten companies that were the largest US-listed stocks in 2005. Their combined returns over the preceding decade (1996-2005) were 233 per cent, compared to 138 per cent for the whole S&P 500. But their returns over the next ten years (2006-2015) were just seven per cent, compared to 102 per cent for the S&P 500. Past performance is indeed not a reliable indicator of future returns.

Investors should avoid being envious, stick to a plan, and invest for the long term in the broader market.

This is the sin of overindulgence or overconsumption. It’s usually associated with food and drink, but it can apply to anything. It means taking far more than is necessary or healthy.

For investors, this can mean wanting the next big thing, buying the news and getting information overload, excessive trading, and even over-diversification (also known as “diworsification”).

But information overload can lead to bad decisions. For example, an investor who had sold at the peak of the tariff concerns in March 2025 would have lost out on the rally that followed (see Figure 6). 

The lesson for investors is to consume information in moderation.

Lust is an intense craving or desire. This obsessive longing can be for anything: power, status, or excitement; and it can be short-lived.

Examples of this behaviour in investing can be falling for speculative assets, day-trading for the thrill of it, chasing shiny new trends, switching between investments repeatedly (investment infidelity), and trying to “get rich quick”.

But trends and meme stocks can turn abruptly and burn investors. Figure 7 shows the ups and downs of four market crazes over the years. This demonstrates how little investors would have gained even if they’d caught the trend at the start – and how much they stood to lose if they joined in later.

Figure 7: Share prices of four market crazes (evolution in per cent)

Past performance is not a reliable indicator of future returns.

Source: Aviva Investors, Bloomberg. Data as of January 30, 2026.

The takeaway for investors is to stick to the plan, not to chase returns on speculative assets and trends.

Most investment underperformance doesn’t come from markets; it comes from behaviour.

Yes, the market is unpredictable… but our behaviours don’t have to be. Markets will rise and fall. That’s their job. Our job is different. It is discipline, patience, and focusing on structure over impulse. Because long-term wealth isn’t built by avoiding market downturns, but by avoiding self-inflicted mistakes.