Mistakes Investors Might Make When Following The Herd

Wes Moss on Forbes.com

If you had to put $10,000 of your cash savings into an investment vehicle today, how would you choose? There’s no guaranteed right or wrong answer with the exact investment, but the strategy investors use when making this decision is where they can go wrong. Taking cognitive shortcuts or falling into common biases is human nature, but there are strategies that enable investors to avoid thoughtlessly joining the herd.

The Bias Of Today’s Market Performance

The S&P 500 Communication Services index has enjoyed a strong 2024, following a 56% gain in 2023. Comparatively, the S&P 500 Information Technology index, which enjoyed a 58% runup in 2023, has lagged a bit behind the Communication Services in 2024. However, both these technology-heavy sectors have outperformed the broader S&P 500 in 2024 (as of the date this article was published).

The macro analysis is that tech has ruled the markets for the past few years, primarily because of a booming artificial intelligence (AI) revolution and tools such as semiconductor chips in demand to fuel it.

New This Week From The Retire Sooner Team

#215 – Revisiting How To Stay A Millionaire, And Other Lessons from The Millionaire Next Door

In today’s episode, Wes points out that the population of mini-millionaires is growing and that society’s perception of them isn’t always very accurate. Producer Mallory Boggs joins to discuss this latest variant of what authors Thomas Stanley and Bill Danko originally coined, The Millionaire Next Door. They elaborate on five habits that this cohort tends to follow. And Wes points out that although investing is often a critical step to becoming a millionaire, it’s perhaps even more essential in the pursuit of staying a millionaire.

#31 – The Reawakening of the Stock Market: Shifting Away from Tech Dominance

In this episode of Money Matters, hosts Wes Moss and Connor Miller discuss the recent broadening out of the stock market, with smaller companies and a wider range of sectors outperforming the previously dominant large tech companies. Wes and Connor also touch on a variety of other topics, such as the ongoing Olympics and the prizes that medalists are awarded by their home country. Wes and Connor have pulled research on how political events impact market performance over time for investors. They conclude by reiterating the foundational principles of investing.

Capital's 'Happy Retiree' Of The Week

Our happy retiree clients, The Cubitts, recently shared some photos with us from their happy place in Bend, Oregon!?

Please note the Cubitt's gave us permission to share these photos.

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