No. of Recommendations: 2
This caught my eye in your reference:

Investing turns most people daffy to some degree, said Meir Statman, a Santa Clara University finance professor. As a specialist in behavioral finance, he explores the human reaction to risk and reward.

"All people, mathematicians included, make the same dumb mistakes," he said. "We are all alcoholics when it comes to the stock market. The best way to deal with it is not to buy individual stocks."


I would reply that "All people who make sweeping, general statements like his... make ... dumb mistakes."

NOT buy individual stocks? Maybe HE shouldn't, but a lot of people do -- and not all of us are "losers", gamblers or drunks.

The example given, of someone who got all caught up in buys of huge amounts of ONE wild stock -- on margin, yet! -- IS an example of pretty stupid action. Read the letters: D I V E R S I F Y. And, before investing in ANYTHING, be it an individual stock, a mutual fund, or some other "great way to make money", proposed by your banker or anyone else, exercise what we call "your own due diligence". Look carefully at factual information before you leap.

Vermonter
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement