Freedom24 Analysis: Five mistakes that cost Romanian investors more than any market downturn

Investor behaviour often has a greater influence on long-term investment outcomes than the asset’s own performance. Lost returns frequently stem from decisions made at the wrong time: selling during volatility, concentrating exposure, overpaying in highly anticipated listings or underestimating fees.   Analysts at Freedom24, the European retail broker of Nasdaq-listed Freedom Holding Corp., currently preparing to launch an office in Romania, highlight five mistakes that can erode Romanian investors' returns.   1. Trying to time the market Equity markets concentrate much of their annual gains in only a few sessions. According to Hartford Funds, missing the ten best days over a 30-year period between 1950 and 2025 would have halved total returns, while missing the top 30 days would have reduced them by 84%.   JPMorgan Asset Management reached a similar conclusion using the S&P 500, the benchmark index of 500 leading US-listed companies. A $10,000 investment made in 2004 and held until 2024 would have grown to about $70,000. Missing the ten best sessions would have reduced the result to less than $35,000.   The best days are almost impossible to identify in advance. Over the past two decades, seven of the ten best sessions occurred within 15 days of the ten worst, meaning investors who leave during declines risk missing the recovery.   2. Concentration in a single asset   Cerebras Systems, a US AI-chip company known for wafer-scale processors, shows how concentration risk can affect a business. In 2024, Abu Dhabi-based G42, an AI and cloud technology group, accounted for 85% of Cerebras’ revenue. By 2025, its share had fallen to 24%, while Mohamed bin Zayed University of Artificial Intelligence, an Abu Dhabi-based AI research institution, generated 62% of sales.   A multi-year OpenAI contract announced in January 2026 and valued at over $20 billion had not generated revenue for Cerebras before the listing. Dependence on G42 was also linked to regulatory risk: CFIUS, the US body that reviews foreign investments for national security concerns, launched a review connected to G42’s investment, delaying the IPO process.   For private investors, the same principle applies: concentrating capital in one stock creates company-specific risk that diversification can reduce.   3. Selling during volatility   On 19 December 2025, the Bank of Japan raised its key rate by 25 basis points to 0.75%, the highest level since 1995. The move pressured high-yield assets and triggered forced liquidation in yen carry-trade positions, where exposure was estimated at about $500 billion.   Such episodes often create conditions in which retail investors lock in losses. According to DALBAR, a US research firm that tracks investor behaviour, the average equity fund investor in 2024 underperformed the S&P 500 by 8.48 percentage points, returning 16.54% versus 25.02% for the index. The gap is largely explained by poorly timed buying and selling. Past crises show the same pattern. Investors who remained invested during the 2008–2009 crisis had recovered their capital and were in profit by 2012, provided they stayed exposed during the recovery.   `These five mistakes have one thing in common: they can lead investors to systematically sell low, when uncertainty is at its highest, and buy high, when optimism is already reflected in prices. The data shows that the gap between the average investor and the market index is persistent. In many cases, it is driven less by the market itself than by behavioural factors — impatience, overconfidence, fear during volatility and the temptation to react to short-term noise instead of following a disciplined investment plan`, said Radu-Iulian Padurean, Network Development Manager at Freedom24. (Photo)   4. Buying stocks on the first day of an IPO   Cerebras shares opened at $385 on their first trading day, more than twice the $185 offering price. By the end of the session, the price had corrected to $311, still around 68% above the IPO price, but below the level paid by investors who bought at the open.   Large first-day gains are not unusual. Statista data shows that the average first-day gain for US IPOs in 2020 was 36%, the highest since 2013. During the dot-com bubble in 2000, the average first-day gain reached around 60%. Such periods often coincide with speculative optimism.   In the following days, Cerebras traded between roughly $236 and $338. Strong first-day performance may appear to confirm the investment case, but it can simply reflect short-term demand rather than fair long-term value.   5. Ignoring fees   A 1% annual fee may seem modest, but its long-term effect is significant. According to QuantFlow Lab, $10,000 invested at a gross return of 10.5% per year would grow to $228,140 with a 0.03% fee, compared with $170,949 with a 1% fee.   Fees are charged on assets under management, not only on profits. Money paid in fees is not reinvested and does not compound. Broad-market index ETFs typically have TERs of 0.03% to 0.20%, while actively managed funds may charge 0.40% to 1.00% or more.