Memory can be faulty and lead a person to remember events wrongly – and therefore have faulty information or opinions about an event. This can be particularly damaging if a person is investing in the stock market, and does not correctly remember any mistakes or failures. There is good news, though! A person could keep a daily journal, recording every day their actions and their thoughts about each action. Then, when looking back, they have a record of what really happened.
- Memory is a big blind spot for all investors, because subconsciously we all choose to inflate our successes.
- To avoid this, it is imperative to record and track our investment actions and realistically assess what we do and learn from it.
- When we do not record what we do, we may be aware that things are not going our way, and still choose to scapegoat some entity rather than taking any personal responsibility.
“Studying investor psychology, however, is not enough, because the more we learn about it, the easier it is to become convinced that these foibles apply to other people and not to ourselves.”
...And We Deliver!
Get our updates delivered right to your inbox.
Sign up and get a copy of our report: The Eight Big Mistakes Many Investors Make.