Mistakes are part of life. Hopefully we all learn from them, then move on, never repeating the worst ones. Here are six top mistakes most investors make that are easily avoided.

1. Using your investment account like a bank. In other words, you have some extra money that you've earned as a bonus or sold a car or some other one time event and you decide to invest it while you determine what you want to do with the money. The problem: if you buy a stock, it may crater the next day and you could lose a large chunk. For example, a war is declared or the price of oil spikes by $10 or some other catastrophe hits. The stock market will react and not in a good way. When you have extra money, put it in the bank. If you don't need it for at least 2 years or longer, then buy some stock. The risk in stocks is too great in the short run to warrant using it as "parking" spot.

Buy and Hold. It's an investment strategy that Warren Buffett believes in, practices, makes a fortune with. But is that an antiquated methodology given the huge swings in the stock market we've all witnessed over the last several years? And how can it apply to the technology sector when every day a new, disruptive software or chip is introduced, revolutionizing the industry?

I would argue that Buy and Hold works just as well as it ever has, only it's not necessarily the right strategy for all sectors. Even with that exception, it can still work for individual companies within a sector such as technology. It all depends on the CEO, the board, and the ability to re-invent the company.

Many stocks have rallied significantly over the last year. In fact, if you bought almost any stock on March 9, 2009, you would have made a great deal of money. That was the low point for almost all stocks as the market gave in for its final capitulation and beat most of us over the head one last time with the heaviest frying pan it could find.

Stocks like Beazer Homes (BZH) and Ford (F) were selling for 24 cents and $1.65 last year. Other great bargains (in hindsight) were everywhere. It was as if the tree of stocks had been hit by a great gust of wind and all its fruit was lying on the ground. Everywhere you looked there were stocks selling for unbelievable prices. Of course, everywhere else you looked there was doom and gloom, ever increasing arguments that screamed "sell," not "buy." The world was definitely ending; capitalism was dead; there was no hope.

Goldman Sachs (GS) has topped its previous record of $100 million dollar trading days. According to filings with the Securities and Exchange Commission, the bank made at least $100 million in net trading revenue on 131 days last year. Its previous record, set in 2008, was for 90 days of $100 million plus revenue.

Last year, during 263 trading days, Goldman lost money on only 19 days. Otherwise, it hit the jackpot pretty much every other day.

Let's see now. Consumers are more pessimistic this month than last month. The Dow Jones Industrial Average loses 100 points on the news. Unemployment is better in one month, worse in another. The DJIA goes up on the good news, down on the bad. Home Depot has a good quarter, raises its dividend, and forecasts a better year for 2010. The stock goes up 50 cents on a day when the market is down 100 points. Other stocks are light on revenues. They go down 10% or more.

The market always sends mixed messages. There has never been a time when all the news is good. That's impossible. If all the news is all good, it means the economy is really thriving. Then investors worry about things being too strong, afraid that inflation will come back, so they sell stocks. When things seem totally awful (see 2008 and 2009 as examples), some investors see nothing but upside potential (see Warren Buffett and General Electric (GE) purchases), and they buy stocks. Most of the time, however, the news is good and bad. There is never a straight upward or downward line for the DJIA or for any stock for a long period of time unless the stock goes out of business, then the line is flat.

Americans just don't know what to believe any more. The Europeans have it easy: as investors, they believe in Americans. We don't have as much confidence, though. A recent survey by AXA Equitable Life Insurance Company (AXA) found that less than 20% of Americans are confident in their abilities to invest in the stock market, despite the fact that 60% believe they need to throw some equities in their portfolios.

In recent years, equities have made people nervous. Following the global financial crisis, the S&P 500 Index lost 37% of its value. It's a tune we've all heard before, though. Similar sentiments followed the 1987 market crash and the collapse of the dot-com economy. True to form, investors reacted, pulling a whopping $242.7 billion out of equity funds in 200 and 2009 and allocating $401.7 billion into bond funds, according to the Investment Company Institute.

Inflation. The Federal Reserve Chief and the governors believe it to be the worst of all possible scourges for the U.S. economy. The specter of it looms large as the government throws more and more money at problems like unemployment, mortgages, and bank bailouts. It would seem inflation is inevitable as that money sloshes around in the economy, driving up prices for fewer goods as manufacturers slow or stop production due to lack of demand. So what's an investor to do?

In recent months, the value of gold has skyrocketed. As a price per ounce, the latest price was $1,104.30.00 per Troy oz. According to Goldprice.org, a site specializing in gold sales, shows price charts for various time periods. In the past year, the price per oz has risen from $852.70 to today's close, an increase of roughly 30%. That sounds like a great deal, but unfortunately it doesn't stand up when compared to stocks.

As we move gradually closer to a stable economy where retail investors are again ready to enter the markets, we see a lot written about which stocks, sectors, and investment types are smart bets for future growth.

Money Magazine recently ran a piece in their Investor's Guide 2010 series entitled "10 Stocks That Can Keep Running," which offers three areas in which the markets are likely to be solid in the coming years. This author's opinion is they were mostly right. But there needs to be a little more explanation for the average retail investor.