But, ultimately it's quite irrational to fear examination of one's own
past mistakes.
The only real grievous error in investment is to continue to succumb
to over confidence, and as a result to repeat the same mistakes again and again.
Investors should also perform a post-analysis of each investment, and
the post-analysis can go along the lines, such as, you could ask yourself,
I could ask myself the question, where did I make money, where did I lose money?
I can mentally separate my good money-making decisions from the bad ones
and then review the beneficial decisions and try to discern,
what exactly did I do correctly?
Did I purchase a stock at a particularly advantageous time or
was the market in general on an upswing?
Similarly as an investor I should review the decisions that
I would probably categorized them as poor.
So I should analyze what went wrong.
Did I buy stocks with poor earnings?
Did I buy stocks with poor fundamentals?
Were the stocks trading at or
near their price highs, the peaks when I purchased them?
Or did I pick up stocks as they were beginning to decline?
Did I basically purchase the stock aptly and
simply make an error when it came to selling,
or was the market in general undergoing a correction phase?
So when reviewing unprofitable decisions, I can look for
patterns or common mistakes.
As an investor I should be aware of any such tendencies and
try to remain mindful of such tendencies.
For example, I could brainstorm past investment decisions and become conscious
of the rules that can help me overcome any bad habits that I may have acquired.
As a trader, and
can also reinforce my reliance on strategies that have served me well.
So as an investor, I just need to remember that admitting and
learning from past investment mistakes,
is the best way to become a smarter, better, and more successful investor.
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