How do you avoid mistakes in which even billionaires make?

Written by: Barry Ritholtz invested my work over decades and in circulation in Wall Street that the panic that the market is expanding and islands is. Chaos can occur as a result of geopolitical factors, inflation, profit warnings or other variables. The resulting fluctuations are often fed by our desire to make a decision, whatever, especially bad decisions. How investors respond to the turmoil of the market is, of course, the focus of financing behavior. As in baseball, your mistakes you should avoid, and this often contributes to long -term financial damage. There is an endless group of the reasons to make mistakes that harm your investment portfolio, although most of them fall under four main categories: believe wrong things, try to work away from the scope of your skills, allow emotions to control your actions, and not the time to serve your interest. Muhammad Al -Lian: 3 powers that reform the summary investment scene is that whether you are an ordinary investor or a billionaire, even minor errors can lead to many bad results. What is the secret to avoiding problems regardless of your money? If the errors are reduced instead of fermenting more victories. Avoid excessive fees, except for a handful of leading money managers, the vast majority of agents cannot justify their costs. Excessive fees have a tremendous effect on the yields, and the wallet is deprived of the cumulative effect over time. Let’s take an extreme example: The story of managers in an office for family investment, which embraced large amounts of money until they became a billionaire. In a report on this right story, entitled “a closed breed that misses billions of dollars while the advisors are increasing,” Bloomberg Devon Bandalton, Dasha Avanasiva and Benjamin staples indicated, the family would increase its wealth by at least $ 13 billion. Investment with billionaires loses its attractiveness in summary, it was better for that family to invest its wealth in low -cost indicators, such as the total stock market ETF of the Vanguard. This would have paid fees at most 0.03%. To compare it with the hedge fund, which can receive up to 2% of the management assets and get 20% of net returns. Most investments are, of course, between these diverse numbers. Just make sure the fees you pay is suitable for what you get. In my experience, the drawings are rarely very rewarding. Do not manage to knead, it can cause you to seek a good performance arrow to buy it at a high price and sell it at a low price, and then repeat it until you record the lesson. This is what we always see: After a series of incredible profits, the media is compiled with an indicator or director, so the buyers – late and intensive. Soon it follows an inevitable return to the normal situation. Modern examples of this phenomenon are the Ark Innovation ETF fund, run by Cathy Woods, and achieved an achievement that exceeds any fund at all. In 2020, the fund recorded 153%profits as it moved from its lowest levels during the pandemic in March 2020 to 11 months to its peak, reaching the yields 359%, which is an incredible number. This was followed by large flow after its success was observed. Cathy Wood: “Bitcoin” is “digital gold” to hedge here at the shrinkage of prices. The behavioral gap was: Most investors bought interests in the fund after the distinctive performance. For unfortunate investors who bought shares after the peak in 2021 compared to about $ 160 per share, the price at the end of 2022 fell by more than 80% to less than $ 30 at the lowest level. Today it trades at about $ 50 a share. These trio income seems to be distant investors now. The investors who entered the market did not score five years until the fund only climbed a return of 1%. As for the investors who bought three years ago, their situation was darker: their average annual return was 7%, according to the data of “Morningsar”. Take your thoughts from the statements of Paul Samuelson, the Nobel laureate: “The investment should be more like looking at the paint as you dried up or watching the grass as you grow. If you want to excite, take $ 800 and go to Las Vegas.” Although dosamine dose due to a risky stock betting can be enjoyable, the wrong management is the best option for most investors looking for their long -term wealth. The problem is that you have to take steps to protect yourself from yourself. To do this, you must prepare a ‘crazy gel account’ or a cowboy account, as it is sometimes called. Add less than 5% of the head of the liquid owner, ie $ 5,000 if you have enough liquidity, so that the size of your Amanak network is $ 100,000. Now you can release the side of the Hedge Box driver of your personality without falling into a great effect. If the case succeeds, it is more likely that you continue to do so, because the matter is like entertainment and does not affect what your important origin represents. If he fails, you may be a gratitude for the wonderful lesson you have received, and it must remind you that it is not your field of specialization. What do you do in your bets, what do you do if you are happy and pick enormous wealth that changes your life? It does not matter if it is through shares in “Nvidia”, or from “Bakhbah” currencies, or from your shares as a founder or options for purchasing shares for employees – sometimes the market becomes strong, and the large volume of the return becomes incredible. But what should you do? I sell or retain the investment, or increase it? Try to use a workframe to reduce remorse. Ask yourself, how will you feel if you keep the investment and its price drops, or if you get out of it and then increase the price increases? The tropical regions of a profit mine for the commodity market investors do not play a loss. The truth is that we do not know where the prices will be in the future, and the sale can lead to a sudden profit that can change your life and your family’s life. If you have a great sudden profit, remember that you do not decide like everything or nothing. The middle option is to sell enough to get rich, giving you big profits as prices rise in the future, and to protect you from repentance if an unexpected collapse has occurred, as was the case with internet businesses. Stop pursuing the yield in the revenue -laying environment in the quarter of the last century, there were three common errors: buying long -term effects, buying unwanted effects with low and dangerous credit rating, or using the leverage to increase your profits. All of these strategies sometimes looked good, and they also helped many smart people to lose large amounts of money, especially the leverage. The most important mistake that investors can make is to ignore that the risk and reward are two sides of the same coin. If you want a higher return and seek behind the dangerous results, you not only increase the possibility of not only getting the highest return, but you may not restore the head of Malik. Little are the mistakes that were more expensive than pursuing the return. You only need to ask those who have invested extensively in high risk plant mortgages before the housing market collapsed, which initially marketed that “its classification (AAA) and that it is safe than the Treasury effects, but with a higher return of 200-300 bases” -a strong reminder that even the most intelligent investors can win in their efforts.