Mistakes new NEPSE investors make — and what to do instead
Most early losses come from record-keeping and fees, not from picking the wrong company.
Keeping no record of what you actually paid
The most common and most expensive habit is not writing purchases down. A year later, after three purchases at different prices, most investors genuinely do not know their true average cost — so they cannot tell whether they are up or down.
Record every purchase as it happens: scrip, quantity, price and date. This takes seconds and is the foundation for every other decision you will make.
Without it, you are relying on the vague feeling that you 'bought around' some price, which is reliably wrong and reliably optimistic.
Ignoring fees until the money arrives
Broker commission, SEBON fee and DP charge apply on both sides of a trade, and capital gains tax applies to the gain. Investors who calculate profit as sell price minus buy price are consistently surprised by the amount that reaches their account.
Fees also make frequent small trading much more expensive than it appears, because flat charges do not shrink with trade size.
Buying on tips without understanding the business
Tips circulate constantly. The problem is not that they are always wrong — it is that when a tip-based holding falls, you have no basis for deciding whether to hold or sell, because you never had a reason for owning it.
A simple test before buying: can you explain in two plain sentences what the company does and why you expect it to do well? If not, you are not investing, you are hoping — and hoping does not tell you what to do when the price moves.
Putting everything into one sector
Nepali retail portfolios often concentrate heavily in a single sector, particularly banking and hydropower, because those are the names people know. That means a single regulatory or seasonal event can move your entire portfolio at once.
You do not need a complicated allocation model. Simply check what share of your money sits in one sector. If one sector holds most of it, you own a bet on that sector rather than a portfolio.
Selling without checking the tax clock
Because capital gains tax depends on holding period, selling shortly before crossing the threshold costs more tax than selling shortly after — for exactly the same gain.
Before selling, check how long you have held. If the difference is a few weeks and you have no urgent need for the money, the tax saving is a real return for doing nothing.
Checking prices daily and calling it research
Watching prices move is absorbing and feels productive, but it mostly produces anxiety and impulsive trades. Real research is understanding what a company does and how it earns.
A weekly look is enough for most long-term investors. Daily checking tends to increase trading, and more trading means more fees.
Common questions
What is the biggest mistake new investors make?
Not recording purchases properly. Without an accurate record of what you paid, including fees, you cannot tell whether a holding is actually profitable — which undermines every decision that follows.
How much of my portfolio should be in one sector?
There is no single correct figure, but if one sector holds most of your money you effectively own a bet on that sector rather than a diversified portfolio. Checking the proportion is more useful than any fixed rule.
Should I check share prices every day?
For most long-term investors, no. Daily checking tends to increase anxiety and trading, and more trading means more fees. A weekly review is generally sufficient.
When is the best time to sell for tax purposes?
That depends on your holding period, since capital gains rates differ by how long you held. Check how long you have held before selling, and confirm current rates with your broker or tax adviser.