Back in August, the market was starting to trade sideways and there were all those recession signs, like the inverted yield curves, etc etc. I was seriously considering moving a bunch of investments into cash but didn't. Since then, the market has been up about 7% -- an average year's worth of gains. The market will tank eventually, but I've had these thoughts of moving to safety many times over the past 3 years. If I'd have acted, I would have missed out on a huge rally.
Investing and trading mistakes often comes from cognitive biases like confirmation bias (only notice evidence that confirms what you already think) and hindsight bias (new knowledge now seems obvious) so I find it's helpful to counteract those biases by reminding myself of what I thought and felt in the past and how wrong I have been. It helps me avoid panic moves in the present because it reminds me how wrong I can be and the I'm still that same person.
Submitted November 01, 2019 at 05:07PM by mettle https://ift.tt/2C7rIUQ
