An ashy lil fap hand
Banned
i found this insightful as new business owner. I'm interested in investing but a lot of what this dude is reporting is sensible. Figured I'd share.
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7 Deadly Sins of Investing
- Thread starter An ashy lil fap hand
- Start date
1.) Confirmation Bias
2.) Endowment Effect
Solution:
--Find qualified people who disagree with you
--Remember that all opinions are not created equal
--Ask yourself, what don't you know and What' you're not seeing
3.) Believing the current trend is going to continue
Solution:
--In most cases, today's winners are tomorrow's losers and vice versa
--Buy Low and Sell High
4.)Overestimating our abilities (results is poor diversification)
5.) Quest for home-runs. Desire to gamble and/or make speculative investments
--50% Loss Requires a 100% Return.
--Wall Street creates a lot of short-term noise to encourage activity
Solution:
Patience - Treat investing like a marathon and not a sprint.
6.) Hometown Bias
--Investing in what is familiar and comfortable (where you are from or where you work)
--Investing only in the market of your own country (Global Equity Market - 49% US Stocks/51% Non-US Stocks)
--Investing only in one sector
Solution
-Diversity
7.) Loss Aversion
Small Corrections -> Loss Aversion -> Overreaction
Solution:
--Be self-aware
--Education yourself about corrections and bear markets