Avoiding Mistakes (Part 1)

Mistake #1: Trying to Control Things You Can’t

Ben Johnson 28.12.2017
Facebook Twitter LinkedIn

“It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes.”
—Warren Buffett 

Investors spend a massive amount of time trying to make all the right moves. The collective effort dedicated to picking good stocks, managers, exchange-traded funds, and so on, is immense. There are countless books, magazines, newsletters (including this one), podcasts, blogs, television programs, and more dedicated to helping investors make the best possible decisions when it comes to selecting and managing investments. Far less energy and commentary is committed to the topic of how not to make the wrong moves. Here, I’ll discuss three common mistakes, all of which I’ve made myself. All three are related in that they are all behavioral issues that have been hard-wired into us over centuries. I’ll also share the potential consequences of these behavioral blunders and how you might be able to avoid them.

Mistake #1: Trying to Control Things You Can’t
Countless factors drive global markets. Randomness rules, so predicting how these myriad variables will influence securities’ prices is impossible. Thinking otherwise is foolish. Deep down, we all know this, but we prognosticate nonetheless. What’s more, we have a tendency to think that we not only know how the future will take shape, but that we have some part in shaping it.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Member.

Register For Free
Facebook Twitter LinkedIn

About Author

Ben Johnson  Ben Johnson, CFA is the Director of Passive Fund Research with Morningstar.

© Copyright 2021 Morningstar Asia Ltd. All rights reserved.

Terms of Use        Privacy Policy