Investment mistakes

Investing / Others
1

Following a list of some common [maybe just so-called for some] investment mistakes.

POLL: Which ones are you going to focus on, if any, next year?

Feel free to discuss, add opinions etc!

  • Not being invested [enough]
  • No [clear] strategy
  • Misunderstanding true risk tolerance
  • Not enough diversification
  • Too high costs
  • Active management
  • Timing the market
  • Chasing performance
  • No rebalancing
  • Too much turnover
  • Too emotional
  • Not enough due diligence
0 voters
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2

The option “all of the above” is missing :joy:

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3

I accept I’m gonna do all of them again.

The question is a bit odd - “to focus on” as in do it the most? :grin:

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5

I believe not understand risk tolerance is something I often think about. I don’t know how to measure it or understand it unless it actually happens

I am pretty sure that the ratio of your net worth to your annual income is a large factor that should be considered while thinking about risk tolerance. No one can truly imagine the pain of seeing your hard earned portfolio becoming half unless you have actually experienced it.

For example -: if annual income is 100K . Portfolio is 50K then even a 40% crash might not feel that bad

But if annual income is 100K, Portfolio is 500K, a 40% crash can be seriously demoralising. Specially because this would come at a later stage in life

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7

Sir, I’d like to have a word with you:

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(also, “Passive Investing Only” is missing from this list)

:wink:

Edit: In earnest, “Chasing Yield” would be the one that I would check.

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8

Missing reply:

I am already on autopilot, nothing to focus on

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9

And you would list that option as an investment mistake …?

12

More frugality, less consumerism

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13

stock picking

14

It misses the option: “none of the above” I’m already happy with my current strategy

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15

Excess fees: You may have missed this when it slipped by last August: “Secretive Dynasty Missed Out on Billions While Advisers Got Rich.” Two managers of a single-family office siphoned off so much money that each became a billionaire. As Bloomberg News reported, had their advisors followed a simpler, less “audacious” strategy, the family would have ended up $13-17 billion richer.

The reporters did not suggest wrongdoing, but allow me to point out that any advisor, let alone two, who became billionaires while wildly underperforming their benchmarks are obviously not fiduciaries. The article suggests they were more interested in their own financial well-being than that of their clients.

Very instructive overall.

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