Mistakes are the bane of investor performance. Naturally, the idea that avoiding errors improves performance is simple enough but our behavior often gets in the way.
There’s a reason why some of the best investors ever are often the most humble. Pride is an obstacle investors need to overcome before improvement happens.
The fact is humans are fallible. Mistakes are inevitable. The great ones accept it, are critical of their own when needed, learn what they can, and move forward.
With pride out the way, finding the recurring mistakes should be easier, right? But again, another obstacle called time gets in the way. Rarely is the same mistake made one decision after another until it’s recognized and removed. And investment decisions are rarely made in rapid succession either.
There’s the old adage that bull and bear markets are just far enough apart that investors forget how the last one ended. Well, similar mistakes have a distance between them too. It makes it difficult to remember the last time the mistake was made. Which can lead to repetition. Continue Reading…