The stock market will move up.
The stock market will move down.
I will think the market’s going to go up, and it will actually go down.
I will think the market’s going to go down, and it will actually go up.
I will think the market will go up or down, and it will actually go sideways. Frustrating.
I will see a short-term price movement in a stock and start questioning my long-term investment thesis.
I will decide I’m bullish and then look for evidence to support that bullish thesis.
I will decide I’m bearish and ignore most bullish evidence, so I don’t disrupt my preconceived point of view.
I will chase performance even though I know that’s not a good way to invest.
I will anchor to a specific price point then make irrational decisions because of that mental anchor.
I will hold a losing position way too long and ignore the advice, “All large losses begin as small losses.”
I will sell a winning position way too early and leave plenty of alpha on the table.
I will hear an investment idea from a friend/colleague/guest speaker/talking head/market expert and take action without making my own evaluation of the evidence.
I will start the year with a sound and well-articulated investment plan, then make day-to-day decisions that are not in line with that plan.
In short, I will be an imperfect investor.
Just remember, an imperfect investor is an honest investor.
Learn more about my research over at Sierra Alpha.
Twitter: @DKellerCMT
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
