| It has been said that the way to earn the
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| | segment of the market has done really
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| most from your investments is to keep
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| | well in the last three months, it is more
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| careful track of them. But be very
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| | likely to under-perform in the following
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| cautious before accepting this advice at
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| | three months, rather than continue its
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| face value; it may very well create more
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| | upward trend. This is known as reversion
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| problems than you realize.The more you
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| | to the mean.Now you're saying, "Wait, so
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| pay attention to your own investments,
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| | holding an investment because of poor
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| the more you become psychologically
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| | performance is irrational, but so is
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| vested in their performance. There is a
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| | holding an investment because of
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| proven tendency to keep an investment
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| | excellent performance?" The only answer
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| after a loss to avoid the pain associated
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| | is, "It depends." Making investment
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| with that loss, or to sell an investment
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| | decisions based on short-term past
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| after a gain to experience the feeling of
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| | performance is generally plagued with
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| a 'winning choice.' This is known as the
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| | irrational tendencies. However, making
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| disposition effect. Either action would
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| | such decisions based upon long-term
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| be an example of using the wrong criteria
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| | performance, relative to the investment
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| for an investment decision, and most
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| | objective being used, is far more
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| often, it leads to lower overall
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| | appropriate, especially when in
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| performance.Perhaps you're saying, "Not a
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| | conjunction with other criteria, such as
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| chance! I don't sell my investments
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| | your time horizon, risk tolerance, and
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| because they've done well, I keep them
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| | overall objective.So what can you do to
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| because they've done well!" In that case,
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| | prevent irrationality?
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| you have just brought up another
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| | Seek the help of a professional!©2005
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| psychological pitfall-forming
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| | Matthew S. Clement, All rights
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| expectations of the future based on
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| | reserved.Matthew S. Clement is a
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| events of the recent past. This is one
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| | financial planner and investment advisor
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| example of a concept known as herding,
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| | representative with Financial Network
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| and it's potentially hazardous. In the
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| | Investment Corporation, member SIPC. He
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| market, there is actually a reverse
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| | provides holistic wealth management and
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| correlation between the recent past and
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| | retirement planning to individuals and
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| the near future. In other words, if a
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| | businesses.
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