7 Deadly Sins of Investing

[An ashy lil fap hand]

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.

 

[MJ Truth]

Could you list them breh? Can't watch the video while at work.

 

[Prodyson]

Could you list them breh? Can't watch the video while at work.

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