Reblog: The Biology of Good Investing


Investment pundits – ourselves included – write a lot about how checking your portfolio too frequently is hazardous to both your financial and mental health. The evidence is overwhelming that those who check their portfolios on a daily basis tend to underperform those who check their portfolios less frequently.

The reason is simple: On any given day, there’s almost a 50-50 chance the market will be up or down. Because people dislike losses more than they enjoy gains – a behavioral finding known as loss aversion – people who check their portfolios daily find the process painful. And just like your gut reaction to pain is to draw away from the source of that pain, your gut reaction to seeing an investment lose money is to make a change. To sell. To panic. To act.

Changing your portfolio, or market timing as our Chief Investment Officer, Dr. Burton Malkiel calls it, is an investor’s Most Serious Mistake.

So what’s the solution? Just check your portfolio less often, right?

Unfortunately, things really don’t get much better if you check less frequently.

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Reblog: Avoid These 7 Beginner Trading Mistakes


When you first start trading, the most likely short term outcome bar far is that you will blow up account.And then quit. But it doesn’t have to be this way! If you avoid these simple beginner trading mistakes then I guarantee that you will have a better shot at trading long enough to become consistently profitable.

Ninety percent of traders lose ninety percent of their money in ninety days. Or so we are told. No one really knows if that is true. Avoid these 7 beginner trading mistakes and hopefully you will avoid become a trading casualty statistic!

  1. Trading too large

Blowing up your account need not be inevitable. But if you insist on risking five, ten, twenty…even one hundred percent of your account on your first trade, I can almost guarantee you that you will eliminate your trading account long before the ninety days are up.

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Top 6 Investing Mistakes of All Times


This post originally appeared here and is by Mastermind, Sana Securities.

Meeting with individual investors over the years has taught me much about investing mistakes. No matter how you classify investors (i.e. fundamental, technical or confused), the mistakes they make are almost invariably identical.

While some mistakes are the result of simply not knowing what to do, many are the results of either (i) losing interest; or (ii) getting overly greedy or fearful, particularly when the tide turns. In either case, much money is lost when people assume things will simply take care of themselves.

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