Probably linked before. Worth a look as the year winds down.LINK to Full ArticleSummary -
1. Hold onto your winners and cut your losses short.
2. Avoid making predictions and forecasts.
3. Study crowd behavior.
4. Think like a contrarian.
5. Asset allocation is critical.
6. Indexing is a better bet..
7. Avoid cognitive and psychological errors.
8. Admit your mistakes.
9. Understand financial cycles.
10. Don’t settle in a comfort zone.
11. Reduce investing friction.
12. Remember that there is no free lunch.
I will reread and try to remember:
A lot of our discussions involve projections /outlooks / predictions of one sort or another. Guilty as charged!
even the explanation of 'go with the crowd until you can recognize when not to' --- that one made me (literally) laugh out loud, as the abbreviation goes
Agree: Consider crowd behavior when making investments. Just because a fund or asset has appreciated rapidly isn’t in itself a reason to jump on the bandwagon. Consider the “crowd” (hot money) effect that might be in play before investing.
Agree Reduce investing friction.. Here, he’s talking about expenses. Yes, I’ve been making a conscious effort to move to ETFs having lower fees than some of the funds I previously owned.
Disagree : Avoid making predictions and forecasts. I can’t help myself from doing this, While I don’t go “all in” or “all out” on an investment based on prediction, I do try to “tilt” one way or another based on what I think is coming down the road. I’m currently cautious about the coming year. I’m guessing the Fed will have to back down somewhat on their path toward rate hikes due to market turmoil. Just a guess. Probably wrong.
Not sure: Hold on to your winners and cut your losses short. I see this working for many others. He’s right in a sense. Yet, I do find myself bailing early from winning positions and “locking in” gains. To be honest, the habit has not served me well. I’d be wealthier if I’d let more of the winners run longer.
Gosh. Fatuous is pretty harsh. Rather than take offense, I’m inclined to defer to the wisdom the longtime host of PBS’s Prairie Home Companion, Garrison Keillor.
“Whatever Floats Your Boat”
no, just the uselessness
>> Consider crowd behavior when making investments.
what does that even mean ? your explanation is no help in practice.
it's all the worse for the less educated and less sophisticated
Don’t know if there is such a place. I have found, and not just in investing, that I am often seduced to make decisions on emotion, and, when aware of it, rely on justifying or short circuiting them with logic. My heart goes one way, my head another. When they line up, boom! I’m a happy guy.
I could write a book about all the things I’ve got wrong. Nearly killed the goose with an ill-advised bet on an Oppenheimer commodities fund couple decades ago. And, like some others here, I invested in HSGFX in its early years. Abandoned that one before too much damage was done. Just 2 of many missteps over a 50+ year investing history.
PS - I think the hardest lesson for me to learn is not to “double down” on a failing investment. Often that simply compounds the problem. A one-way street!