Sunday, August 30, 2009

The Mistakes We Make and Why We Make Them Part 1

How investors think often gets in the way of their investment success. While many investors vow time and agin not to make the same mistakes with investing again, most of us are unaware of how the mistake was even made in the first place. Only understanding the reasons why we make mistakes that in hindsight seem so avoidable will help us avoid the mistakes again in the future.

Behavioral finace is the study of why smart people do the stupid things they do when it comes to investing money. The empotions that overwhelm us when dealing with money often leads to trurning smart people into stupid investors.

For example we will focus on the winning stocks and ingore losers when deciding if we are good investors. A typical investor will extoll the virtures of the stock they bought that is up 20% and ignore the other 5 losers they bought.

Barry Bulakites
America's IRA Experts
America’s # 1 Provider of Retirement Distribution Strategies

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