So what are the deadly sins of investing?
Darren Winters takes us through the list…
First on the list of deadly sins of investing is not to get angry
I am not cracking the enigma code by saying that investments do not always work out. But the trick is to try not to get angry when they don’t. Getting angry, a normal human reaction is one of the deadly sins of investing because it delays taking the right action to correct the loss.
They say greed is good but greed is also on the list of deadly sins of investing
Greedy for more profits can lead to you overstaying a profitable position. Yodeling (holding) Bitcoin comes to mind. The fear of missing out is another example were greed can trip investors up.
Being lazy is also one of the deadly sins of investing
Not paying attention to your investments, even if you have an advisor, will lead to poor long-term results.
Being overconfident should also feature high up on the list of the deadly sins of investing
If you play this game long enough, eventually you are going to, get it wrong. The grandmaster players are great at the game because they know when they are wrong and they don’t keep staying wrong,
‘I’m only rich because I know when I’m wrong’ — George Soros
Remember that nobody (including the grand masters of the game) are smarter than the market.
Lust should also feature on the list of the deadly sins of investing
When an investor/trader lusts after a certain investment they tend to overpay for it.
Envy is another potential pitfall that features on the list of deadly sins of investing
Being envious of someone’s portfolio and trying to replicate their success can sometimes lead to poor decision making and ultimately losses.
Gluttony can be bad for your waistline and should also be listed as one of the deadly sins of investing
They say overindulging in anything is bad and sinful. So putting too much into your investment is a recipe for disaster. Sure, there are a handful of investors that have risked it all on one bet and left the casino with the pot. But frankly, these types are few and far between. Moreover, they can afford to get it wrong but can you?
So that is the list of deadly sins of investing, getting angry, greedy, lazy, overconfident, being lustful and a glutton. Perhaps the deadly sins of investing can be summed up in one word, being human?
That is why technical analysis can help you from falling prey to the deadly sins of investing.