A Behavioral Stock Market Outlook For 2019

David Keller

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.

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