Why People Fail At Investing

in LeoFinance2 months ago

Hey Jessinvestors

My investing journey has been one learning as much as I can, reading history, learning about fundamentals, metrics, sentiment, macro and micro factors, capital flows and more.

While this information does help me make more informed decision and influencers me in terms of position sizing and risk I am willing to take, I think one of the key learnings is how I've failed at investing and how others fail at investing.

Believe it or not, I don't want to fucking invest, I hate it, it annoys me that I can't just work my way to wealth but this is the name of the game. I have no choice, either I get on the investing bandwagon or get crushed by holding cash.

I have no history of investing, my family have no history of investing, all they did was buy property, save cash, give it to investment companies and hope that there's something left when they retire, hardly the most active of investors.

This is also a luxury boomer and generation Z in certain countries were able to enjoy and something they don't understand.

A lot of the older generation are not willing to accept that this inflated market is anything but how it should be, and why should they? They won, they sit with a majority of the assets so why would they question the system.

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Greed and speed

Probably the most common one, EVERYONE wants wealth without work, to get rich quick, to gamble it all on one trade, one platform, one lump sum and think that's all they need. This mindset often leads to you being vulnerable in any sort of downturn and often attracts people into schemes with promises of massive rewards.

Overconfidence

It's not what you know that gets you hurt, its what you know that just ain't so that will help you see your arse. Being a Perma bulls means you're going to be right in some seasonality of the market, but being a Perma bull also means that downturns can crush all the gains you made.

These numbers go up guys are great in bull runs, they can do no wrong but you're a one-trick pony and when the race starts to run the other way, this pony is often taken out back and shot.

Fear

I've met a lot of people like this, they would rather hold on to cash, don't see the point in investing, they are so tied to the number assigned to their cash position they don't understand that in the current climate investing is your only chance of staying on par, nevermind getting ahead.

Those in fear of investing opt to let the government speculate for them and its a death by 1000 cuts, each year it gets harder as your savings allow you to do less even when the number you add to it increases. It's poring all your money into a leaky bucket, that asset investors get to pull from and reap the rewards.

Risk reward ratio

This one is a little tricky, not all investments are created equal and I can talk about this one for hours but I think this one is even lost on crypto investors.

I see so many people piling cash into altcoins thinking they're rich but all they've done is enter the roach motel, you can check in but you can't check out, the moment you try to sell you move the market and start eating into any potential profit.

It's not only about the market cap and current price, it's about liquidity, it's about demand, it's about a competitive order book, but it's also about productive use of capital.

Overtrading

These are often my stock and option trading buddies so hell-bent on milking a good trade that they try to leverage it, or try to repeat it with companies that have similar price movements and ignoring the underling asset they are trading.

We are so addicted to short dopamine hits and chasing spreads to pick up pennies in front of steamroller because ti "feels" good not that its the most productive use of time and capital.

There's a reason Warren Buffet preaches time in the market over timing the market.

Looking for shortcuts

Oh, this is a popular one, pennywise pound foolish, there are few people good at saving but it doesn't mean they are good at investing. They would rather by the "cheap" coin and end up looking like a complete nincompoop, they'll make silly rationale like oh Nikola is cheaper than Tesla so ill by the cheaper one since they do the same thing.

No, they don't do the same thing, you're not shopping for corn flakes and saying well the generic is just as good, it doesn't work that way in investing.

What was your lesson in investing

Which one of these was your downfall and got you burned? For me, it's been not able to size up risk and reward.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

Let's connect

If you liked this post, sprinkle it with an upvote or esteem and if you don't already, consider following me @chekohler and subscribe to my fanbase

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Emotion is one of the biggest reason people lose money.

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Lol I don’t even think I’m that disciplined the easiest way for me is to invest and then never look at the price! It’s as if i don’t own it and o focus on earning to select a new thing to buy and ignore lol

Absolutely, we place so much emphasis and importance on a number on a screen and make rash decisions due to stress and panic

I know I've mad bad trades because of it.

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More info why you see this.

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Toruk the party who rocks the party, lol sorry I coudln't resist

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lol who is Toruk?

His the biggest LEO holder so when you see this comment you know his curated you and you get like 50 LEO which is a pretty sweet treat

Really ? How do I post to Leo?

You can use their front end here - https://leofinance.io/ their token trades at $0.47 at the moment. You can use any HIVE front end also and just use the tag leofinance, but you will have to pay a tax for not using their front end so it comes off your final post balance, so it's best to use their front end

And will the people on Hive still upvote my posts? I will still earn Hive?

Yes that is correct you can double dip

"Why people fail to invest" Suddenly a topic for a guy like me.
My biggest mistake is to "trade to often" even if it iis only 5-10 times a year.
Buy it - Hodl it - and forget it = That has been my best way. And also statistic the best way. If you forget your investment you can not fail in FAIR, GREED , OVERTRADING and so on. YOU are your worst enemy....

I forget I had enjin in my second ledger and when I was checkin it it was 700 usd. If I knew I had it I had for sure sold it long time ago.

Lol, maybe you should put all your crypto in a time lock or in an interest-earning account and forget about it. I do the same thing, I make it so hard for myself to be able to trade it I don't see the point unless it was life-changing money.

I still have the ability to earn fiat so don't see the need to touch my crypto

"crypto in a time lock" - I think you are talking about uniswap...:-) Just now the gas-fee dont let me withdraw. Ether has just now a inbuild time-lock

LOL oh you got jokes now, yes ETH gas fees and even BTC fees are a time lock for me too, I am too cheap to pay miners

!BEER


Hey @chekohler, here is a little bit of BEER from @minimining for you. Enjoy it!

Learn how to earn FREE BEER each day by staking your BEER.

My investing lesson? Find the time and money to do it. Avoid debt at all costs.

Find those who do it better than you and take what you can from their strategies while remembering your unique standpoint.

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I think taking your time to research and find the best risk reward ratio is highly underrated id rather be late to be party but have more assurity then try to be a maverick and pick out bottoms or take on high risk investments

I learn every day and it helps to gain perspective over how I balance my portfolio I like to listen to both advocates and detractors of every asset class

I am trading quite rarely so i haven't done any mistakes but each and every single one you mentioned above, i watch it happening around Steemit/Hive.

Also some friends of mine will give me next week around 150 euro each to invest it for them, so i don't know i may do some mistakes there. My strategy will be to buy some coins and hold them though

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You are braver than me, I would never be able to take someone's money to invest, I'm too scared I will lose it, I am happy to lose my own money but not other peoples money. Additionally, I always want people to take ownership of their money

I think it was Timothy Sykes (a popular trading guru) who called himself a "Glorified History Teacher". I can say there is a massive amount of truth to that statement. Another great news; Shapeshift ends KYC:

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It's true, if you listen to guys like Mike Green, and especially Chris Cole they always speaking out the cyclical repetitive nature of things and people are so fixated on the minutia they can't see they are headed in the same way we did years before. Those who don't read history are doomed to repeat it

IM so impressed with Erik, I thought he lost his way a bit over the last few years but it looks like his back on track, no KYC is the way

I'm guilty of putting few hundreds in several alt coins, don't punish me too hard please :)

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LOL I don't need to beat up on anyone, the market does that enough, I also made some bad alt coin plays and I learned from it, I learned where to find info, who not to listen to, why you should check order books, agendas of the source of info and so much more. Alt coins wanting my BTC need to do ALOT better to convince me then they did back in 2017

No alt coin can eat from my BTC/ETH stash haha
But I still buy some random shitcoin from time to time... I didn't fix that yet.
I'll start checking more on order books, agenda, etc, thanks for the advice ;)

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they would rather hold on to cash, don't see the point in investing,

I am curious do you still have cash savings or all in cryptocurrencies?

Yes I do, I still keep 40% of my net worth in cash because it’s so liquid and easy to transfer into investments since I invest long term once I secure a position it’s either to trade very far in the future or it kicks off cash flow

I still think cash is important for investing because it allows you to pull the trigger on opportunities! The only reason I sit on such a larger cash postion is because it’s hard to find investments that are realising positive real rates after you factor in inflation and fees

I still think cash is important for investing because it allows you to pull the trigger on opportunities!

I understand

One of the reasons why I fail to invest is the fear of loss. The thoughts that investment has a risk gets me all burned up and prefer to keep my cash than invest but I have learned over time and plan to invest reasonably this year to a legit investment site.

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I can understand that, but we all lose by keeping cash, I would say that investing is for everyone it's just not every opportunity is for everyone. If you're conservative and just want to protect what you have then precious metals like gold, silver and stocks in that market are a food fit,

maybe because there is no trust in the site? I do not really understand. But it seems to me that people are simply afraid to invest.
These wars between users confuse new investors)
What do you think?

I think the trust factor would only extend to people who are already aware of how the governance works but for the outside investor who doesn't give a shit about HIVE but wants to speculate it doesn't matter. I think for this chain it would be a combination of hamstringing people into setting up a native wallet which is pretty annoying, not enough use cases for the token and also confusion on what the token is meant for,

HIVE is meant for resources, liquidity and governance but because its distributed through the reward pool people don't see a reason to own it, so they dump it.

You have to give people a reason to own it, there are some promising talks ive seen about turning HIVE into a HBD interest account and maintaining the peg and use cases like that can help the coin

Also, I don't see the point of HIVe having a high value it makes no sense, its there to maintain liquidity now tokens on top if they can do what they want

Thank you)

I made a mistake to invest in a stock based on speculation of it going up because of some news. I thought as the news is positive about the company it would make good gain but it did not
And 2nd mistake I made was to sell it when it went down without waiting to get to break even point.
I learnt about time in the market rather than timing the market 👍

Stocks today are very different from stocks of the hard money period, now it's so heavily influenced by sentiment and money printing, trying to short, fight the fed is a tough game to play. If you're in emerging market stocks perhaps you still get that old feel of fundamentals still playing a role but stocks are still a tough play not really my ball game.

I just look for good dividend stocks, IM not trying to buy low and sell high I just want access to their cash flow at a discount rate.

My biggest problem is learning to cut losses. Can’t always be right no matter the odds. Learn to keep capital safe is the most important part of the game of trading. No capital will mean I can’t trade and can’t earn. It also takes longer and more risk to recover from big losses. Not easy trading so I don’t make it my day job.

Ah I know the feeling there's always this hope it might turn around, but sometimes it's better to take that loss, shift the capital to something that's working and try to salvage it. I don't often rebalance my portfolio but I check it regularly, I don't also focus too much on the individual asset I own, but more how that market I'm in is doing and do I have a good allocation in that market.

I'm not trying to win all the time, just not lose most of the time lol

What’s a jessinvestor?

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If you read the end of any of my posts you'll see its a long-standing joke

I really tend to be more interested in investing for the long haul than trading. I just want to buy something that looks promising and leave it alone to grow. Even here in the cryptosphere where fortunes are made and lost in minutes (it seems) I'd rather just stake and keep it there.

=^..^=

Growth doesn't always go in a straight 45-degree angle to the right, Amazon, when it went public for example, had 6 50% draw downs, so trust your instincts I say, if you know its a sound investment stick with it. That's how I feel about BTC, I know where its going so these market ups and downs mean nothing to me

There's a reason Warren Buffet preaches time in the market over timing the market.

Easy to say for a grandpa.

Just kidding. I will be fourty later this year, shouldn't make jokes about old age.

I guess my lesson has been to not listen to fear or wait, not really, mainly poor timing and - at times - overconfidence. I am 3.5 years in the market and I feel like I'm slowly coming to grasps, although - at the same time - I feel like we can ( and possibly should ) keep learning. It's ever evolving, like life.

At the same time, I feel all lessons were needed. We all walk our own paths. No regrets. It's fun, most of the time ;<)

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