Markets have a way of luring investors into doing things they shouldn’t. Be it innovative new products or promises of high returns, there’s always something to tempt an investor’s resolve. And it ends up being costly. As with many things in life, avoiding certain things often lead to the greatest results.
I was reminded of this while browsing Another Investor’s Anthology. Part of its collection is a chapter from an outdated book by Claude Rosenberg, Jr. It’s a list of investing rules that are more likely to cost you money than make it in the long run. So investing don’ts. His list pertains to stocks specifically but is true for most investments.
Here’s the thing. None of the rules are new. They’ve been repeated so many times that they should sound obvious. Which is the point.
Common investing mistakes are common because it’s so easy to fall back into the trap of making them. Sometimes we forget how it turned out the last time. Sometimes it’s a momentary lapse of judgment. Whatever the reason, hindsight reveals what we likely already knew — we never should have done it in the first place.
But that’s life. Mistakes will be made. The goal is to limit the damage. Timely reminders of the more obvious ones may save us from ourselves someday. Continue Reading…