Learning From the Mistakes Made by Legendary Investors

I can't remember whether I ever ran this article in May or not.  If not, this holiday weekend seemed a good time to visit this topic of learning from the mistakes of the masters.  If so, the holiday weekend seemed a like good to revisit this very important topic ranked as #14 of the Top 40 AAII articles of all time.  We'll finally get a break from the heat tomorrow so enjoy the rest of Independence Day weekend! 

TOP40: Article 14

Learning From the Mistakes Made by Legendary Investors In my 20-plus years of investing, I have read too many books to count that describe the investment strategies and philosophies of some of the most successful investors of all time. While it is useful to try to mimic what has worked for other investors—assuming their strategy fits your own risk tolerances and time horizon—knowing what hasn’t worked can be just as useful. The article Learning From the Mistakes Made by Legendary Investors is from author Michael Batnick, whose latest book is entitled “Big Mistakes: The Best Investors and Their Worst Investments.” Batnick first wanted to let people know that investing is hard. This statement isn’t meant to scare people; it’s more about managing expectations. It’s easy to make money during a bull market. It can be downright nerve-racking during a severe downturn. In his book, and in the article, Batnick highlights some of the missteps made by the likes of John Bogle and Benjamin Graham. Some topics Batnick touches on include: The fact that everyone makes mistakes. Knowing this helps you set realistic expectations for yourself It’s not easy to beat the market The importance of the timing of returns In his article, Batnick covers 10 common investing mistakes, including: Expecting the future to look like the recent past Not admitting when you’ve made a mistake Talking to friends and family about investing As humans we all make mistakes. The same is true when it comes to investing. Knowing those mistakes investors make most often can help you to avoid them. The article Learning From the Mistakes Made by Legendary Investors highlights 10 common investor mistakes to help you make better investment decisions. Stay tuned: Tomorrow I highlight an AAII Journal article that studied whether dollar cost averaging has better results than lump-sum investing.           Read the full article now —     Learning From the Mistakes Made by Legendary Investors