Many of us waste money on some of our investments — and may not even realize it. Broadly, “when making an investment in any investment strategy or specific stock, that money often becomes considered a ‘waste’ if there is not a specific purpose or plan that investment or stock is designed to help you accomplish,” says Ronnie Thompson, investment adviser representative and owner of True North Advisors.

But beyond that, are there specific types of investments that pros consider a waste of money? We asked six financial experts and advisers just that. Should you want individual help figuring this out for your investment portfolio, you can find a financial adviser at NAPFA, CFP Board or by using this free tool that matches you to fiduciary advisers from our ad partner SmartAsset.

Investments pros tell us are a waste of money right nowFee-laden, wirehouse-promoted mutual funds and certain AI stocks — Jeff Muscatello, financial risk manager and vice president of research at Douglass Winthrop Advisors

“Many investors are unknowingly losing a significant portion of their returns to the layered fee structures of wirehouse-promoted mutual funds, where advisory fees are stacked on top of expense ratios, 12b-1 marketing fees and hidden transaction costs. This lack of transparency often leaves the client unsure of exactly what they are paying for or which underlying assets they actually own at any given time.” (Unsure if you’re paying these types of fees? This article can help.)

“In markets, the primary risk today is the ‘circularity’ of AI finance, where billions rotate in a closed loop between chip makers, cloud providers and LLM designers, effectively subsidizing each other’s growth while masking the true level of external customer demand. We remain long-term believers in the technology’s potential, but we are concerned that investors are paying extreme multiples for companies whose specific monetization paths remain unproven.”

Hype-driven stocks and gold — Jason Bernat, president and CEO of American Financial Services

“There are stocks I wouldn’t buy because you are chasing short-term hype. I would advise against buying something because of a social media buzz or headlines and not fundamentals.

Last year, gold returned around 65%. Today, people want to buy any gold stock. While it may continue to grow in the short-term, these same clients aren’t thinking long-term. Just because there was a 60% return last year doesn’t mean it’s going to happen again.”

Certain annuities and REITs — Ronnie Thompson, investment adviser representative and owner of True North Advisors

“Annuities can be great tools for accomplishing specific goals. They can provide protection and guarantees that include interest and/or income. They can also be complex and hinder liquidity or access to some or all of the funds for a period of specified time. If the wrong person purchases these vehicles for the wrong reasons, they can be considered a waste of money.

Another investment I see people buy incorrectly or for the wrong reasons are Real Estate Investment Trusts (REITs). These investments are positioned as an opportunity for investors to participate in the interest earning potential of real estate without the downside of the costs in time and expenses for the management of it. These investments, like many investments, come with the risk of loss, can be extremely illiquid, and can be difficult for the investor to get their money out.”

Single-residence rental real estate — Preston D. Cherry, CFP, founder and wealth adviser at Concurrent Wealth

“Single-residence rental real estate is often overrated for high-income earners who want real estate exposure without being active owners. The financial upside tends to be highlighted, while the emotional, managerial, time and risk costs of ownership are understated. Even with property managers, single-family rentals require oversight, tolerance for disruption, and ongoing decision-making that can quietly erode both returns and quality of life for busy professionals.”

Investments with high fees — Jillian Stephenson, CPA and assistant teaching professor at Carnegie Mellon University’s Heinz College

“In terms of stocks and investments, the biggest waste of money is paying high fees for average results. This could be fees to financial advisers or fees that are charged within funds such as mutual funds, ETF’s, etc. You have to consider the fees that you are paying before you invest and determine if there are other options out there with potentially lower fees and similar results.”

Hype-driven investments — Ryan Haiss, certified financial planner at Flynn Zito Capital Management

“The biggest waste I see is chasing hype-driven investments or the stock that is up the most because a friend, co-worker or headline made it sound compelling. By the time most people hear about it, a lot of the gains are already gone. When volatility hits, those same investors tend to sell out of fear, locking in losses. That buy high, sell low cycle is one of the most common ways people hurt their returns.

A disciplined portfolio built around clear goals, time horizon, and risk tolerance tends to deliver far better outcomes. Boring, diversified strategies usually outperform emotional decision making over the long run.”