Seven dumbest investment mistakes
By Scott Woolley
Emotions can be expensive, especially when you start making investing decisions with your gut instead of your brain. Fortunately, there are ways to avoid–or at least limit–the mistakes that we oh-so-human investors tend to make.
Daniel Kahneman won the Nobel prize in economics seven years ago for his work on how irrational humans systematically make mistakes. Since then, research in the field of behavioural finance has exploded.
Given the recent market turmoil what common, and costly, mistakes should investors be especially vigilant to avoid making today?
One is a direct result of the stock market plunge. People who bailed out of stocks after losing as much as half of their investments are now anxiously sitting out the market recovery, says Amy Barrett, a fee-only financial adviser and director of investments at Savant Capital.
Those people have “anchored” themselves to the value of the stock market at its trough, where they bailed out. They’re having a hard time accepting the fact that stocks might really be good values at their new, higher levels. In the past that behaviour has been a sure recipe for missing a market rebound, says Barrett.
“I’d like to shake these people and tell them to get out of their rut,” she says.
Emotional Investors’ Seven Dumbest Mistakes
Here are descriptions of the most common cognitive errors investors make–and some tips for getting your rational mind to override your potentially costly emotions.
source: Sify Finance
Search Our Archives
- Stocks Trading above their 50 day moving average - DMA In Stock Research
- Download free Ebooks based on Technical Analysis In Personal Training
- TOP 100 Stocks with the Highest P/E as on July 14th, 2013 In Stock Research
- TOP 100 Stocks with the Lowest P/E as on July 14th, 2013 In Stock Research
- Charting Pathsala - Your guide to Techincals In Technical Analysis
- Sanjay I want to buy 8k mile plz give me sugg...In Intraday calls for 27-02-17
- seema What is your take on Axis and Reliance...In Intraday calls for 27-02-17
- Aniket Biswas hi cb, btst idea target plz...In Intraday calls for 27-02-17
- mrp Hi cb , holding yes bank, kotak bank &...In Intraday calls for 27-02-17
- ajit Hi CB sir, I have bought bajaj auto at...In Intraday calls for 27-02-17
- Prathmesh CB sir what levels can see in Coal Ind...In Intraday calls for 27-02-17
- Prathmesh CB sir as you told Wabag is 573 now......In Intraday calls for 27-02-17
- Prasadvsn27 Hi cb sir good afternoon. Please view ...In Intraday calls for 27-02-17
- SRINI dr reddys target for next month please...In Intraday calls for 27-02-17