Published September 23, 2016
If you believe some of the world’s greatest investors, such as Benjamin Graham and Warren Buffet, it’s not investments that cause people to lose money; rather, it’s people who cause people to lose their money. What is meant by that is investing with sound principles and intelligent practices will always have a greater likelihood of success. However, without a solid investment plan and the discipline to stay the course, investors are much more vulnerable to their emotions which, more often than not, can lead to disastrous results. In other words, an investor’s worst enemy is likely to be themselves.
To use a more familiar analogy, consider a business executive who decides to get back into fitness. To ensure that he had a plan and that he would be doing everything correctly according to his objectives, he hired a personal trainer. They customized an exercise and nutrition regimen and began training together twice a week. After two months, the executive felt as if he knew exactly what to do, so he fired his trainer. After all, he had the plan and he knew the regimen, so why pay for more training?