Blog: Common Mistakes Investors Make (Part 1)
Most investors lose money in the markets. If they would just have a buy and hold strategy and invest in the broad market for the long term and do not panic in a downturn and are do overenthusiastic in a roaring bull market they should make somewhere between 8 % and 10 % p.a. in most 10 year + holding periods. However, the real performance is often less than the benchmark. How is this possible? Well, the major reason of underperformance or losing money is that the investor does not have a SYSTEM. A system tells you when to buy shares, when to sell shares with a small manageable loss and when and how to take significant profits. It also tells you how to diversify your portfolio and gives you the psychological strength (discipline) to follow your rules.
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