Most people figure that if they can only avoid making mistakes with their investing, things will turn out fine. Yet sometimes, it's the mistakes you make that teach you the most, getting you outside of your comfort zone and stretching your limits to help improve your results.

Beyond investing
Living in New England, I've heard a lot about the late Sen. Ted Kennedy's tireless dedication to his work. Some words from his son particularly struck home:

"He was a mountain climber, navigator, skipper, tactician, airplane pilot, rodeo rider, ski jumper, dog lover and all around adventurer. Our family vacations left us all injured and exhausted."

Imagine that -- vacations leaving you injured and exhausted. That hardly seems like the kind of vacation one should hope for, but maybe it is. It does, after all, reflect a vacation of activity, of adventure, of living.

It's the same with investing. If we're really investing for the long haul in solid stocks that we've carefully chosen, ones that we think will appreciate considerably for us over time, we're bound to be disappointed now and then. They won't all perform as expected. Some will leave us injured and exhausted.

Reduce your losses
Fortunately, we can learn and profit from our mistakes. One of the most common errors we make is investing in companies that we don't understand well enough, and ignoring some of the risks they face. Here are a few companies along with some of the risks they spell out in their 10-K reports.

Transocean (NYSE:RIG): "Demand for our services is particularly sensitive to the level of exploration, development, and production activity of, and the corresponding capital spending by, oil and natural gas companies, including national oil companies." You always need to understand a company's place within its industry. For instance, to understand Transocean, you need to know whether oil and gas companies such as ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) will be increasing or decreasing their spending on exploration, development, and production of fuels. Otherwise, you're investing with blinders on and may end up blindsided -- injured and exhausted. It's the same with other industry operators, such as Noble (NYSE:NE).

NVIDIA (NASDAQ:NVDA): "Our business is cyclical in nature and is currently experiencing a severe downturn." While some industries, such as consumer staples and pharmaceuticals, don't see their revenues fluctuate too much in times of economic upheaval, cyclical industries such as semiconductors and construction materials can see big moves up and down. Investors need to stay aware of this, ideally with an understanding of the industry's prospects in the short and long run. This is true of larger companies, too, such as Intel (NASDAQ:INTC) and Advanced Micro Devices.

First Solar (NASDAQ:FSLR): You might be thinking that this is a no-brainer investment, as solar power is only getting stronger. But one of the company's risk factors from its annual report is that "[a]n increase in interest rates or lending rates or tightening of the supply of capital in the global financial markets could make it difficult for end-users to finance the cost of a PV system," which could lead to reduced demand and lower prices. Most of us probably wouldn't link interest rates to solar energy, but companies that rely on access to capital can suffer when financial markets break down. If we just assume that solar companies will be fine regardless of what happens to the financial system, we stand a greater chance of getting whacked.

Good news
Fortunately, it's not that hard to discover what we need to understand about a company. Most companies spell out their risks in great detail in their 10-K reports filed with the SEC. A little time spent reading a company's reports can be very enlightening -- and if you make use of the information, it can boost your portfolio, too.

And even if you goof up now and then, know that it's inevitable -- even the world's best investors get injured along the way. But if you don't try, you won't ever reap the benefits of investing.

Ever been scared to invest? Jim Royal has a home run stock idea that you've probably been too afraid to buy.

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. First Solar is a Motley Fool Rule Breakers selection. NVIDIA is a Motley Fool Stock Advisor pick. Intel is a Motley Fool Inside Value selection. Try any of our investing newsletters free for 30 days. The Motley Fool is Fools writing for Fools.