Mirror, mirror on the wall, who’s the most overconfident of them all?
Do you recognize any of the following examples of investment behaviors?
Overconfidence. “Hey, I beat the market! For like a whole week!” You and your ego went on to book a thirty percent loss the very next week.
Loss Aversion. “Yeah, I got out of stock in 2009. Don’t want anything to do with them anymore.” You missed the ten year bull market.
Inertia. “I’m gonna wait till it hits fifty, then I’ll buy.” It hit fifty, and you didn’t buy it because you feared it would drop more.
Regret avoidance. Well, it hit fifty and you didn’t buy it because you feared it would drop more. It went up again to sixty, and now you regret it.
If you recognize any of these disruptive traits, maybe it’s time to work on the most important investment in your portfolio: You!
Knowing what pushes your buttons is your strongest defense against Wall Street’s toxic messages.
Fix the Investor highlights many of the biases and behaviors that hold private investors back from successful investing.
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