Investor Psychology

Investors: The Dangers Of Performance Chasing

The most prevalent disclaimer in the investments world goes something like this – “past performance may not be repeated”. If you don’t believe us, just read the disclaimers from investment firms, including ours. Despite the prevalence of this disclaimer, investors often place the lion’s share of their decision making process…

Behavioral Bias: How Investors Can Profit From It

All investors make errors that can often be traced back to a behavioral bias or emotional mistake. If under certain circumstances these mistakes are systematic, then it is not a stretch to believe we can develop systematic strategies to profit from them. After all, this is the essence of active…

Understanding the Ups and Downs of Investor Behavior

“The investor’s chief problem – and even his worst enemy – is likely to be himself” – Ben Graham Investing is not easy. If you are an active investor, directly involved in the investment process, it requires an immense amount of work. Picking investments, developing a buying process and a…

3 Golden Nuggets of Wisdom for New Traders

One of the biggest hurdles in trading is overcoming our natural tendencies (or bad habits) we bring with us when getting started. If we’re not careful, these seemingly small behavioral biases can turn into big problems and prevent bigger success down the road. The three biggest trading challenges I see…

Investing Trends: Why It Pays To Stay In The Now

A Simple And Powerful Concept Eckhart Tolle’s New York Times Best Seller The Power Of Now has sold over 3 million copies worldwide and has been translated into over 30 languages. The basic premise of the book is captured in the excerpt below: “Nothing has happened in the past; it…

The Anatomy Of A Successful Trader: 12 Key Traits

For those serious about trading for a living, the following is a list of characteristics found in every highly successful trader. Realize that 1% of the people who play this game take 99% of the profits. That means 99% of people who call themselves “traders” are forking over all their…

Mind Games: 3 Behavioral Traits Investors Should Be Mindful Of

In “Bubbles and Elevators”, we discussed how human beings do seemingly ridiculous things to fulfill their instinctive need to mimic what others are doing, right or wrong, logical or illogical. The greatest investors, those that make money when markets are rising and avoid the pain when bear markets occur, are…