The Dangers of Self-Directed Investing
As investing has become cheaper and more accessible to the public, so too have a myriad of problems. We recently came across 2 articles that provide examples of what can happen when people are left to their own devices.
The most common reason why self-directed investment traders are unsuccessful (other than “trading while drunk”) is emotional short-term decision making. It’s very easy to fall into behavioral finance traps like recency-bias (what has performed well recently), status-quo bias (what you’re familiar with), or simply panic selling when the markets get volatile.
While it’s technically feasible to represent yourself in a court of law for anything above and beyond a traffic ticket, most rational people hire attorneys. Likewise, while you can immerse yourself on the internet searching for medical cures, most rational people hire doctors. These are trained professionals who’ve devoted their lifetimes to keeping people out of jail and free of sickness. Yet when it comes to personal finances, many people go it alone using simplistic information found online or heard about from untrained friends, often ending with frustration and disappointment.
The next time you find yourself making costly investment decisions, consider hiring a team of trained financial professionals like Position Wealth. We’ve spent our careers helping people feel good about their financial picture. Contact us if you’re ready to talk!