By Sydney Van Vierzen
For the quarter ending June 30, 2022 What’s the biggest risk to your long-term returns? Is it inflation? Interest rates? Energy prices? What if I told you that the biggest risk to your long-term returns was probably you? What’s maybe even more surprising is that the risk isn’t that you’re doing too little, it’s that you’re probably doing too much!
The average investor makes too many decisions and the result of all this decision-making is lower returns. While the idea of expending energy to end up with less might not be an intuitive idea, it’s widely observed in investing. Activity is typically linked to emotions like fear and greed. One day an investor may feel the fear of missing out on the next hot trend, and by the next day they could fear a market downturn. The markets have a way of making investors manic and myopic – two traits that almost assure unpleasing long-term results in investing.
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