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    using the wrong criteria for an investment decision, and most often, it leads to lower overall performance.

    Perhaps you’re saying, “Not a chance! I

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    It has been said that the way to earn the most from your investments is to keep careful track of them. But be very cautious before accepting this advice at face value; it may very well create more problems than you realize.

    The more you pay attention to your own investments, the more you become psychologically vested in their performance. There is a proven tendency to keep an investment after a loss to avoid the pain associated with that loss, or to sell an investment after a gain to experience the feeling of a ‘winning choice.’ This is known as the disposition effect. Either action would be an example of using the wrong criteria for an investment decision, and most often, it leads to lower overall performance.

    Perhaps you’re saying, “Not a chance! I d

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    The more you pay attention to your own investments, the more you become psychologically vested in their performance. There is a proven tendency to keep an investment after a loss to avoid the pain associated with that loss, or to sell an investment after a gain to experience the feeling of a ‘winning choice.’ This is known as the disposition effect. Either action would be an example of using the wrong criteria for an investment decision, and most often, it leads to lower overall performance.

    Perhaps you’re saying, “Not a chance! I

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    ogically vested in their performance. There is a proven tendency to keep an investment after a loss to avoid the pain associated with that loss, or to sell an investment after a gain to experience the feeling of a ‘winning choice.’ This is known as the disposition effect. Either action would be an example of using the wrong criteria for an investment decision, and most often, it leads to lower overall performance.

    Perhaps you’re saying, “Not a chance! I

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    an investment after a gain to experience the feeling of a ‘winning choice.’ This is known as the disposition effect. Either action would be an example of using the wrong criteria for an investment decision, and most often, it leads to lower overall performance.

    Perhaps you’re saying, “Not a chance! I

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    using the wrong criteria for an investment decision, and most often, it leads to lower overall performance.

    Perhaps you’re saying, “Not a chance! I don’t sell my investments because they’ve done well, I keep them because they’ve done well!” In that case, you have just brought up another psychological pitfall—forming expectations of the future based on events of the recent past. This is one example of a concept known as herding, and it’s potentially hazardous. In the market, there is actually a reverse correlation between the recent past and the near future. In other words, if a segment of the market has done really well in the last three months, it is more likely to under-perform in the following three months, rather than continue its upward trend. This

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