Why Investors suffer great losses and will continue to do so

It’s pretty interesting for me to understand how market and human psychology works, and perplexes me even more as to why don’t investors attempt to challenge “common knowledge” of investment methodologies like “buy-and-hold”.??

As an investment adviser managing portfolios over the past 5 years and outperforming S&P500, here are some of the common pitfalls I see in investors:?

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1. Not being aware of the causes of huge losses?

Very often, they have an advisor to blame. Who in turn blames the market, and the inability of the investor to stomach risks, to “think long-term”. ? As a result, investors get hit again, and again, when the market crashes.

2. Many investors and advisors alike subscribe to the “buy-and-hold” advice when it should have been “buy and hold until fundamental changes”. ?

They ignore the fact that fundamentals do change. Only to find out that they are losing money when they become sitting ducks.??

Or perhaps their fundamentals views were wrong in the first place. Instead of taking action to limit damage, it is easier to be in denial and chant the “buy-and-hold” mantra.??

If one studies the history of market prices, one can see that there were long tormenting times of sideway moving markets in history.? Or buy and hold had caused investors to lose all their profits accumulated over the last few years??(2008 Financial Crisis)

3. No stop-loss policy? ?

Eg. When a 10% loss occurs, it is then allowed to widen to 30% and more, until it becomes too late for investors to react. ? When things go wrong, investors freeze up like a deer caught in headlights and end up getting run over. This is precisely how investors get killed and become “long-term investors” unwittingly.??

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Do you face any of the above? Don’t wait till another crisis before taking proactive steps to protect your capital.??

For a tailored approach for your portfolio, schedule a personalized consultation with me to discover how you can avoid the common pitfalls above.??

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#investmentspecialist #investingthings #investing #buyandhold?