Why People Fail At Investing

Hey Jessinvestors

My investing journey has been one learning as much as I can, reading history, learning about fundamentals, metrics, sentiment, macro and micro factors, capital flows and more.

While this information does help me make more informed decision and influencers me in terms of position sizing and risk I am willing to take, I think one of the key learnings is how I've failed at investing and how others fail at investing.

Believe it or not, I don't want to fucking invest, I hate it, it annoys me that I can't just work my way to wealth but this is the name of the game. I have no choice, either I get on the investing bandwagon or get crushed by holding cash.

I have no history of investing, my family have no history of investing, all they did was buy property, save cash, give it to investment companies and hope that there's something left when they retire, hardly the most active of investors.

This is also a luxury boomer and generation Z in certain countries were able to enjoy and something they don't understand.

A lot of the older generation are not willing to accept that this inflated market is anything but how it should be, and why should they? They won, they sit with a majority of the assets so why would they question the system.

Greed and speed

Probably the most common one, EVERYONE wants wealth without work, to get rich quick, to gamble it all on one trade, one platform, one lump sum and think that's all they need. This mindset often leads to you being vulnerable in any sort of downturn and often attracts people into schemes with promises of massive rewards.

Overconfidence

It's not what you know that gets you hurt, its what you know that just ain't so that will help you see your arse. Being a Perma bulls means you're going to be right in some seasonality of the market, but being a Perma bull also means that downturns can crush all the gains you made.

These numbers go up guys are great in bull runs, they can do no wrong but you're a one-trick pony and when the race starts to run the other way, this pony is often taken out back and shot.

Fear

I've met a lot of people like this, they would rather hold on to cash, don't see the point in investing, they are so tied to the number assigned to their cash position they don't understand that in the current climate investing is your only chance of staying on par, nevermind getting ahead.

Those in fear of investing opt to let the government speculate for them and its a death by 1000 cuts, each year it gets harder as your savings allow you to do less even when the number you add to it increases. It's poring all your money into a leaky bucket, that asset investors get to pull from and reap the rewards.

Risk reward ratio

This one is a little tricky, not all investments are created equal and I can talk about this one for hours but I think this one is even lost on crypto investors.

I see so many people piling cash into altcoins thinking they're rich but all they've done is enter the roach motel, you can check in but you can't check out, the moment you try to sell you move the market and start eating into any potential profit.

It's not only about the market cap and current price, it's about liquidity, it's about demand, it's about a competitive order book, but it's also about productive use of capital.

Overtrading

These are often my stock and option trading buddies so hell-bent on milking a good trade that they try to leverage it, or try to repeat it with companies that have similar price movements and ignoring the underling asset they are trading.

We are so addicted to short dopamine hits and chasing spreads to pick up pennies in front of steamroller because ti "feels" good not that its the most productive use of time and capital.

There's a reason Warren Buffet preaches time in the market over timing the market.

Looking for shortcuts

Oh, this is a popular one, pennywise pound foolish, there are few people good at saving but it doesn't mean they are good at investing. They would rather by the "cheap" coin and end up looking like a complete nincompoop, they'll make silly rationale like oh Nikola is cheaper than Tesla so ill by the cheaper one since they do the same thing.

No, they don't do the same thing, you're not shopping for corn flakes and saying well the generic is just as good, it doesn't work that way in investing.