What is your greatest pyschological barrier to successful investing?

Max said:

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?

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Max , I used to do the same as you , it requires real determination to use a buy and hold system , but it usually pays off in the end.
You must rebalance and take some profits along the way though , another thing I sometimes neglect to do , sometimes one doesn't want to sell a stock that looks like it is going sky high , but that is precisely the time to take your gains.
That is one of the reasons I began investing mainly in REIT's , they pay distributions so you have a good income stream even when prices are declining , in fact payout percentages actually increase as the prices drop , kind of like bonds , especially if you rebalance and buy more when prices are lower.
Investing for capital gains alone is more like speculating than investing , one should always have dividend paying companies in their portfolio , that's one of the mistakes I have corrected in my investing style over the years.
Another mistake I make is that I watch BNN way too much , it can be very depressing .

Two main ones:
-When buying stocks, low price speculation (I know I should buy today because it's a fair buy, but what happens if I wait until tomorrow, will it sell cheaper than it did today?), fighting that urge to market time and speculate. If it's a good deal, if it's a great company selling at 10 times earnings, buy it now because anything can happen tomorrow, the stock market could take off and never return back until 10 years from now.
-Ignoring the stock market and focusing on business results rather than stock market results. seeing the stock price drop and fighting the feeling that I'd made a bad decision buying the stock. I remind myself, if the stock market closed for the next 5 years, would I still be happy I owning a piece of this business. Thinking of where this business will be in 5 years and the bargain price paid for it, and realizing the stock market shouldn't validate whether you'd picked it up at a fair price. The stock market does what it does, it's the guy sitting beside you, your business partner owning the same piece of stock, constantly quoting you at what price he'll buy or sell you out. Doesn't mean he knows what he's talking about.