As a confessional and as a vicarious learning tool for myself and others, I wanted to try and create a list of some of the mental traps we fall into when investing.
Mine is my time horizon. I start with a long term focus picking a value stock with a great balance sheet, good earnings and growth prospects in a unfavourable sector of the market.
As time goes by, I see the stock decline, and I look at the overall market which looks like it is going down, and I start getting this feeling I should sell and buy it back when it gets cheaper. Every time I do this, I end up making a bad decision and losing money.
What psychological pitfals have you fallen for or narrowly avoided?
Mine is my time horizon. I start with a long term focus picking a value stock with a great balance sheet, good earnings and growth prospects in a unfavourable sector of the market.
As time goes by, I see the stock decline, and I look at the overall market which looks like it is going down, and I start getting this feeling I should sell and buy it back when it gets cheaper. Every time I do this, I end up making a bad decision and losing money.
What psychological pitfals have you fallen for or narrowly avoided?