Learn from an experienced investor's 10-year journey. Common mistakes & solutions. Share your thoughts!
1. Underinvesting in Yourself
Mistake: Neglecting consistent knowledge and up-to-date information.
Solution: Invest in yourself. Continuously learn; seek valuable insights.
2. Choosing Wrong Assets ("Wrong Ship")
Mistake: Sticking to familiar, smaller markets (home bias); ignoring stronger global assets.
Solution: Focus on what you control. Understand valuations. Choose fundamentally strong assets.
3. Lacking Courage ("No Guts")
Mistake: Hesitating to seize opportunities despite research.
Solution: Seize opportunity. If analysis is solid, don't let fear hold you back.
4. Falling in Love with an Asset
Mistake: Holding losing assets due to emotion/flawed narratives; unnecessary "averaging down."
Solution: Be willing to cut losses. Stop "digging deeper" when fundamentals change.
5. Letting Emotions Drive Decisions
Mistake: Impulsive revenge trading or overconfidence during drawdowns.
Solution: When emotions run high, pause, evaluate, and take a break.
6. Hot Hand Fallacy (Overconfidence)
Mistake: Overconfidence after wins, leading to reckless actions.
Solution: Beware of overconfidence. Think rationally; seek opposing views.
7. Outside Circle of Competence
Mistake: Investing in poorly understood areas.
Solution: Stick to what you know. If you don't understand, say no.
8. Not Learning from Past Mistakes
Mistake: Repeating investment errors despite previous losses.
Solution: Be open about mistakes; commit to continuous learning.
Losses are inevitable. Manage your wins and losses.