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By Steve Lowrie, Lowrie Financial
Special to the Financial Independence Hub
You probably first heard this classic joke years ago. Maybe you even laughed at it once or twice:
Patient: “Doctor, doctor, it hurts when I do this.”
Doctor: “Then stop doing it.”
Yes, it’s silly … and yet wise. We’ve all been known to ignore what is painfully obvious, especially as investors.
For example, even though we know it’s a mistake to buy high and sell low, there’s ample evidence that this is exactly what most of us end up doing anyway. In “How Investors Leave Billions on the Table,” Wall Street Journal columnist Jason Zweig shared a litany of analyses on how investors lose available returns through hyperactive trading. Zweig published his post in 2013, but human nature hasn’t changed, so the stats undoubtedly remain relevant: We’re hard-wired to trade at all the wrong times.
Why we make mistakes
